A Comparative Theory of Corporate Governance

Wharton Financial Institutions Center Working Paper No. 03-27

Posted: 12 Oct 2003

See all articles by Franklin Allen

Franklin Allen

Imperial College London

Douglas M. Gale

New York University (NYU) - Department of Economics

Date Written: December 2002

Abstract

The term corporate governance is used in two distinct ways. In Anglo-Saxon countries like the US and UK good corporate governance involves firms pursuing the interests of shareholders. In other countries like Japan, Germany and France it involves pursuing the interests of all stakeholders including employees and customers as well as shareholders. Anglo-Saxon capitalism has been widely analyzed but stakeholder capitalism has not. This paper argues that stakeholder capitalism can often be superior when markets are not perfect and complete.

Suggested Citation

Allen, Franklin and Gale, Douglas M., A Comparative Theory of Corporate Governance (December 2002). Wharton Financial Institutions Center Working Paper No. 03-27. Available at SSRN: https://ssrn.com/abstract=442841

Franklin Allen (Contact Author)

Imperial College London ( email )

South Kensington Campus
Exhibition Road
London, Greater London SW7 2AZ
United Kingdom

Douglas M. Gale

New York University (NYU) - Department of Economics ( email )

269 Mercer Street, 7th Floor
New York, NY 10011
United States
(212) 998-8944 (Phone)
(212) 995-3932 (Fax)

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