35 Pages Posted: 6 Aug 2009 Last revised: 30 Jan 2014
Date Written: June 7, 2010
Has there been convergence of corporate governance systems? There has been a great deal of controversy on this issue in the last ten years, and it is likely that this debate is to re-emerge in the context of the current financial crisis. In this paper I use a new quantitative methodology ('leximetrics') in order to answer the question of whether there has been convergence, divergence or persistence of the legal rules which shape country-level differences in corporate governance. The paper is based on new indices which code the development of shareholder, creditor, and worker protection in France, Germany, India, the UK and the US from 1970 to 2005. The main result is that one has to distinguish between different areas of law: the laws have converged in shareholder protection, they have diverged in worker protection and in creditor protection converging and diverging trends even out. These results do not depend on the distinction between Civil Law and Common Law countries.
This paper is part of a wider research project. The related papers can be downloaded at: http://ssrn.com/abstract=897479 and http://ssrn.com/abstract=1431008
Keywords: corporate governance, leximetrics, shareholder protection, creditor protection, worker protection, convergence
JEL Classification: G30, G38, K00, K12, K31, N20, N40, O16, P50
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