Product Market Competition, Corporate Governance and Legal Origin

37 Pages Posted: 26 Apr 2012

See all articles by Prabirjit Sarkar

Prabirjit Sarkar

University of Cambridge

Simon Deakin

University of Cambridge - Centre for Business Research (CBR); European Corporate Governance Institute (ECGI); University of Cambridge - Faculty of Law

Ajit Singh

United Nations; University of Cambridge

Dominic Heesang Chai

University of Manchester - Manchester Business School; University of Cambridge - Centre for Business Research (CBR)

Date Written: March 8, 2012

Abstract

Using the persistence of corporate profits as a measure of the intensity of product market competition in 19 countries for the period 1995-2005, we find that civil law systems are more competitive, in this sense, than common law ones. Greater shareholder protection increases competition between firms in common law countries, but reduces it in civil law ones. We conclude that shareholder rights act as complements to product market competition in the common law world but not in the civil law world, and explain this result by reference to the common-law origins of shareholder-orientated corporate governance.

Keywords: legal origin, corporate governance, shareholder protection, product market competition, persistence of profits

JEL Classification: K22, G28, L22, L25

Suggested Citation

Sarkar, Prabirjit and Deakin, Simon F. and Singh, Ajit and Chai, Dominic H., Product Market Competition, Corporate Governance and Legal Origin (March 8, 2012). Available at SSRN: https://ssrn.com/abstract=2018254 or http://dx.doi.org/10.2139/ssrn.2018254

Prabirjit Sarkar (Contact Author)

University of Cambridge ( email )

Centre for Business Research
Cambridge, CB2 1AG
United Kingdom

Simon F. Deakin

University of Cambridge - Centre for Business Research (CBR) ( email )

Top Floor, Judge Business School Building
Trumpington Street
Cambridge, CB2 1AG
United Kingdom
+ 44 1223 335243 (Phone)

European Corporate Governance Institute (ECGI)

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

HOME PAGE: http://www.ecgi.org

University of Cambridge - Faculty of Law ( email )

10 West Road
Cambridge, CB3 9DZ
United Kingdom

Ajit Singh

United Nations ( email )

New York, NY 10017
United States

University of Cambridge ( email )

Austin Robinson Building
Sidgwick Avenue
Cambridge, CB3 9DD
United Kingdom
+ 44 1223 350434 (Phone)
+ 44 1223 740479 (Fax)

Dominic H. Chai

University of Manchester - Manchester Business School ( email )

Booth Street West
Manchester, M15 6PB
United Kingdom

University of Cambridge - Centre for Business Research (CBR) ( email )

Top Floor, Judge Business School Building
Trumpington Street
Cambridge, CB2 1AG
United Kingdom

Here is the Coronavirus
related research on SSRN

Paper statistics

Downloads
86
Abstract Views
722
rank
315,493
PlumX Metrics