Market Distorsions and Corporate Governance

37 Pages Posted: 30 Dec 2004

See all articles by David Kelsey

David Kelsey

University of Exeter Business School - Department of Economics

Frank Milne

Queen's University - Department of Economics

Date Written: December 2004

Abstract

This paper studies corporate governance when a firm operates in imperfect markets. We derive firms' decisions from utility maximization by individuals. This reduces the usual monopoly distortion. Corporate governance can effect the equilibrium in the product (or input) markets. This enables us to endogenize the objective function of the firm. If the firm cannot commit not to change its constitution, we find a Coase-like result where all market power is lost in the limit. We present a more abstract model of governance in the presence of market distortions and discuss its implications for the governance of universities.

Keywords: Corporate governance, stakeholder, strategic delegation, economics of universities

JEL Classification: D70, L13, L20

Suggested Citation

Kelsey, David and Milne, Frank, Market Distorsions and Corporate Governance (December 2004). Available at SSRN: https://ssrn.com/abstract=641321 or http://dx.doi.org/10.2139/ssrn.641321

David Kelsey (Contact Author)

University of Exeter Business School - Department of Economics ( email )

Streatham Court
Exeter, Devon EX4 4PU
United Kingdom
013 9226 2536 (Phone)

HOME PAGE: http://people.exeter.ac.uk/dk210/

Frank Milne

Queen's University - Department of Economics ( email )

Here is the Coronavirus
related research on SSRN

Paper statistics

Downloads
105
Abstract Views
1,151
rank
277,372
PlumX Metrics