Corporate Governance, Competition, and Political Parties

The corporate governance systems of continental Europe have traditionally been quite different to those of the liberal market economies (e.g. the US and the UK). Company ownership has been dominated by incumbent blockholders, with a relatively minor role for minority shareholders and institutional investors. Business strategy has focused on the achievement of social stability - taking into account the interests of a broad group stakeholders - rather than the maximisation of shareholder value. However, since the mid-1990s, European corporations have adopted many of the characteristics of the Anglo-American shareholder model. Furthermore, such an increased shareholder-orientation has coincided with a significant role for the Left in European government. This presents a puzzle, as conventional wisdom does not usually conceive of the Left as an enthusiastic proponent of pro-shareholder capitalism. This book provides an analysis of this paradox by examining how economic factors have interacted with the policy preferences of political parties to cause a significant change in the European system of corporate governance. This book argues that the post-war support of the European Left for the prevailing blockholder-dominated corporate system depended on the willingness of blockholders to share economic rents with employees, both through higher wages and greater employment stability. However, during the 1990s, product markets became more competitive in many European countries. The sharing of rents between social actors became increasingly difficult to sustain. In such an environment, the Left relinquished its traditional social partnership with blockholders and embraced many aspects of the shareholder model. This explanation is supported through a panel data econometric analysis of 15 non-liberal market economies. Subsequent case study chapters examine the political economy of recent corporate governance change in Germany and Italy.

ISBN 0199576815   Pages 348 ISBN13 9780199576814 (What's this?)   Weight (grammes) 668 Publisher Oxford University Press   Published in Oxford Imprint Oxford University Press   Height (mm) 240 Format Hardback   Width (mm) 162 Publication date 21 Jan 2010   Spine width (mm) 24 DEWEY 658.4   Academic level Undergraduate, Postgraduate, Professional / Scholarly DEWEY edition DC22

		List of Figures
		List of Tables
1		Introduction: Political Partisanship and the Puzzle of Corporate Governance Change in Europe		1
2		A Theory of Partisanship and Corporate Governance Change		33
3		Alternative Explanations of Corporate Governance: A Critique of the Literature		67
4		Measuring Change in Corporate Governance		91
5		The Measurement of Product Market Competition		116
6		A Panel Data Analysis of Corporate Governance Change		137
7		Robustness and Dynamic Modeling		190
8		Qualitative Analysis: Introduction to the Case Studies		214
9		The Case of Germany: From Blockholding to Hybrid Corporate Governance Regime		223
10		The Case of Italy: Everything Changes, Everything Stays the Same		256
11		Conclusions		283
		Bibliography		292
		Index		325

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