The Changing Corporate Governance Paradigm: Implications for Transition and Developing Countries

31 Pages Posted: 29 Sep 1999

See all articles by Erik Berglöf

Erik Berglöf

Institute of Global Affairs, London School of Economics and Political Science

Ernst-Ludwig von Thadden

Universitaet Mannheim; Centre for Economic Policy Research (CEPR); European Corporate Governance Institute (ECGI)

Date Written: June 1999

Abstract

The rapidly growing literature studying the relationship between legal origin, investor protection and finance has stimulated an important debate in academic circles. It has also generated a cottage industry of applied research and strong policy statements. This paper discusses the implications, in particular for developing and transition countries, from this literature. Our general conclusion is that its focus on the plight of small investors is too narrow when applied to these countries. We argue that this group is unlikely to play an important role in most developing and transition countries. External investors may still be crucial, particularly in transition countries, but they are more likely to come in as strategic investors or creditors. The paper also proposes a broader paradigm including other stakeholders and mechanisms of governance in order to better understand the problems facing these countries and generate policy implications that compensate for the weaknesses of capital markets.

JEL Classification: D23, G32, G38, K22, O17

Suggested Citation

Berglöf, Erik and von Thadden, Ernst-Ludwig, The Changing Corporate Governance Paradigm: Implications for Transition and Developing Countries (June 1999). Conference Paper, Annual World Bank Conference on Development Economics, Washington D.C.. Available at SSRN: https://ssrn.com/abstract=183708 or http://dx.doi.org/10.2139/ssrn.183708

Erik Berglöf (Contact Author)

Institute of Global Affairs, London School of Economics and Political Science ( email )

Houghton Street
London, WC2A 2AE
United Kingdom

Ernst-Ludwig Von Thadden

Universitaet Mannheim ( email )

Department of Economics
Mannheim, 68131
Germany

Centre for Economic Policy Research (CEPR)

London
United Kingdom

European Corporate Governance Institute (ECGI)

c/o the Royal Academies of Belgium
Rue Ducale 1 Hertogsstraat
1000 Brussels
Belgium

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