"Nothing But Wind"? The Past and Future of Comparative Corporate Governance

Abstract

Corporate law scholarship has come a long way since Bayless Manning some four decades ago famously pronounced it dead. Not only has doctrinal scholarship continued its project of critique and rationalization, but empirical and economic approaches have injected new life into the field. Recent years have seen the rise of comparative corporate governance (CCG) as an increasingly mainstream approach within the world of corporate governance studies. This is a function partly of an increasing international orientation on the part of legal scholars and partly of an increasingly empirical turn in corporate law scholarship generally. Different practices in other jurisdictions present at least the possibility of natural experiments that attempt to find causal relationships between particular features of a corporate governance regime and real-world outcomes. This body of research has become particularly relevant as we enter the second decade of the twenty-first century. The financial crisis has called into question many of our traditional ways of thinking about corporate governance and the relationship between business enterprises and the state. Are there other countries that do it better? This Article discusses what is unique about CCG as an approach to corporate governance studies. It begins by examining the concepts of corporate governance and comparative corporate governance, making the point that comparative corporate governance has in general been focused on agency problems between shareholders and managers but need not be so. It then looks at methodological issues in comparative corporate governance, critiquing in particular economic Darwinist theories and the failure of theories of international competition in corporate governance to incorporate the notion of comparative advantage. Finally, it reviews major lessons learned from this body of work and suggests direction for future research. Among other things, it calls for more comparative research into alternative business entities dubbed “uncorporations” by Larry Ribstein and into corporate governance in increasingly important economies such as China and India.

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