National Models of Corporate Governance Theory

Comparison and Evolution of Global Corporate Governance 1. Classification

According to their respective research needs, academics have classified the corporate governance models adopted by countries around the world. Berglof's (1997) summary review categorizes global corporate governance models into "internal - external", "distance - control", "market-based - relationship-oriented", "market-based - bank-based", and so on. -Bank-based", etc. The most representative classification results are The most representative classification result is to distinguish the more typical corporate governance models in the world as the market-oriented model represented by the United States and the United Kingdom, i.e., "Anglo-American model", and the bank-oriented model represented by Japan and Germany, i.e., "German-Japanese model". The former is also known as the shareholder governance model. It is also often referred to as a "disclosure-based system" (Nestor and Thompson, 1999) because of its strict requirements for corporate information disclosure. The latter highlights the central role of banks in corporate governance, with laws and regulations often prohibiting "speculative" activities rather than insisting on strict disclosure, and is considered to be closer to the stakeholder governance model, mainly through the externalized camera-based governance mechanism of the main bank or universal bank, as well as the participation of different stakeholders*** in the internal governance structure.

LLSV (1998) uses data from 49 countries and regions to distinguish between four traditional legal systems to explain different corporate governance models, and thus divides the global corporate governance model into the Anglo-Saxon model (including the United States, the United Kingdom, and the former British colonies), the French model (including the French, Spanish, and Portuguese colonial sphere of influence), German model (including Central Europe and Japan), and the Scandinavian model (comprising mainly the Nordic countries).

Claessens et al. (1999,2000) examined a sample of nearly 3,000 firms in nine East Asian economic entities and found that the East Asian model has emerged with a new agency problem, i.e., the intrusion of the interests of majority shareholders against minority shareholders, and summarized the ****same characteristics of East Asian firms.Khan (2001) summarizes them in two ways: firstly, the majority of East Asian firms are controlled by families; and second, family control is often reinforced by equity pyramids, horizontal shareholdings, and deviations from the one-share-one-vote rule. He views the corporate governance system of East Asian family firms as a new type of system parallel to the market-oriented and bank-oriented ones.

Some other scholars have studied the transition economy model. This model mainly exists in Russia and Central and Eastern Europe and other countries of the transition economy, their **** the same characteristics are the existence of a large number of large-scale state-owned enterprises need to be reorganized, and at the same time inherited the original more chaotic legal system. In countries with economies in transition, the most prominent problem of corporate governance is insider control, and the most typical country for insider control is Russia. Because corporate insiders hold a majority of shares, the interests of corporate insiders are strongly represented, and the managerial layer de facto holds controlling power in the corporation by law (Masahiko Aoki, 1995b). The insider (usually a manager, in Poland a worker) who holds or controls a majority of the shares of the company becomes the new "owner". He represents his own or the group's interests, not those of the ordinary shareholders. （Studies on Czech Republic (Cull, Robret, 2002) and (Schutte, Clemens, 2000) show that in Czech privatized enterprises, managers use their power to embezzle the assets of the enterprise in the absence of the actual owner, forming the so-called serious "tunneling" problem. This is a serious problem of so-called "tunneling", which is a constraint on the rapid growth of Czech privatized enterprises. This is an important constraint on the rapid reconstruction of Czech privatized enterprises.

2. Why the difference?

There are two typical theoretical perspectives: one is the political origins theory; it is believed that the form of corporate governance contracts in each country is related to the country's cultural traditions, legal provisions, and rent-seeking by political interest groups.Roe (2000) argues that the main political factor distinguishing the United States from the European countries is whether or not there is a deep social democracy. Britain and the United States are countries with a strong individualistic and populist ideology, and there is an enduring distrust of the concentration of power. It does not matter whether this concentration of power is within or outside government. And, the popular and competitive elections and the prevalence of social interest groups reinforce the decentralization of economic power, which ultimately leads to a fragmented corporate shareholding structure. In contrast, the German and Japanese market systems are not very well developed, collectivism is deep, and society pursues long-term commitments to its citizens, so the corporate equity structure is concentrated.USV, on the other hand, from the perspective of legal resources, the differences in corporate governance across countries lie in the differing protection of shareholders, and to give an explanation, the countries of the universal law system give outside investors-shareholders and creditors-the the strongest protection, French civil law countries have the weakest protection for outside investors, and German law countries and Scandinavian law countries fall somewhere in between . Corporate control is more centralized in countries with weak investor protection than in countries with strong investor protection, whereas in countries with strong investor protection, the Burley and Means type of firms, i.e., fragmentation of shareholders and control of the firm by professional managers, is more prevalent. The second is the path dependence theory. It is believed that the corporate ownership structure and governance rules of each country are determined by the initial conditions of the country, in which efficiency and political group ancestry seeking are the key factors, Gordon (1983) Shriver and Vishny (1997) believe that investor's legal protection and concentration of ownership are the key factors of a good corporate governance structure, so they believe that the United States, the United Kingdom, Germany, and Japan have the world's best corporate governance systems. The OECD Corporate Governance Guidelines, on the other hand, argue that a good or effective corporate governance system is country-specific, and that it must be harmonized with the country's market characteristics, institutional environment, and social traditions (OECD, 1999).

Bank-centered corporate governance showed the advantage of stability in the 1980s when the Japanese economy was not at fault. It was believed that the long-sightedness of the banks enabled companies to focus primarily on long-term investment decisions. By the 1990s, with the collapse of the Japanese economy, the view changed. Kang and Stulz (1998) argue that Japanese banks, far from being agents of rational investment, mistakenly imposed soft budget constraints and transitioned lending to firms that were declining and in need of restructuring. Edwards and Fisher ,1994) and Hellwig,1999) argue that German banks were similarly on a downward spiral and failed to provide effective corporate governance. The Anglo-American model has both brilliant and crisis years, especially since 2001, the successive emergence of Enron, WorldCom, Xerox false accounts scandal also makes people doubt the efficiency of its corporate governance; Southeast Asian family control model once created the "Southeast Asian miracle", but since 1998 the financial crisis has exposed many serious problems. But the financial crisis since 1998 has exposed many serious flaws. 1、Convergence theory

(1) Convergence to the shareholder-centered model. Early scholars of corporate governance believed that the shareholder-centered Anglo-American model was more effective than other models and would become the mainstream model in the future. Especially after World War II and until the 1970s, when American corporations dominated the world, there was a greater belief in the Anglo-American model as the best in the world.Foster (2001).Easterbrook and daniel (1991) argue that the pressure of competition in the international marketplace will drive the evolution of corporate governance across countries towards a uniformly efficient model, i.e., a shareholder-oriented model with a well-developed Shareholder-centered model with well-developed stock markets and decentralized ownership.Jacopy (2001) shows that changes in a large number of enactments in the European Union and Japan have led to the evolution of a convergence of relational governance systems towards the market-based governance model in the United States.

(2) The idea of convergence to a stakeholder model.

After the 1970s, Freeman, Donaldson, Blair, Mitchell, and others argued that the stakeholder model is more vital than the shareholder supremacy model, and that it is the direction of convergence of various corporate governance models. From the point of view of the characteristics and actual operation of global corporate governance models, the Japanese and German corporate governance models are closer to the stakeholder model. The rise of the Japanese and German economies after the end of World War II and their strong competitive advantage for a long time after the 1970s provide strong evidence for the stakeholder governance model.

(3) Legal Convergence and Functional Convergence

2. Against Convergence Theory ①Legal Viewpoint

Roe, Professor of Law, Columbia University

②Political and Cultural Viewpoint

③Path Dependence Viewpoint

A Review of Chinese and Western Corporate Governance Theories

A Review of Chinese and Western Corporate Governance Theories