Post-War Institutional Shocks - the Divergence of Italian and Japanese Corporate Governance Models

Abstract

After the first section, introducing some typical problems of family capitalism, the following three sections of the paper consider the ambiguity of the legal framework defining the modern corporation, the two way relation between technology and property rights and the different mechanisms by which the control of the firms can be transferred to new individuals. In the other sections we examine the different role that the American occupation has had in the two countries: in Italy it involved the definitive blessing and reinforcement of both State-owned corporations and family controlled pyramidal groups that had emerged during the fascist period, whereas in Japan it caused the end of the power of the great zaibatsu families. We will also consider how inter-firm share holding can promote (Japan) or inhibit (Italy) expansion of large corporations and the mechanisms that have made each model self-sustaining after the initial institutional shocks.

JEL Classification: K1, K2, P1, D2, N8