Corporate Governance in Comparative Perspective: Prospects for Convergence

Abstract

Pundits of globalization predict the eventual demise of the stakeholder corporate governance model found in Europe and Japan and its replacement by the Anglo-American shareholder model. Were this to occur, it would sharply change the relationship of employees to their employer in many parts of the world. Yet it's not obvious that convergence is inevitable. There is considerable inertia and persistence of national governance models due to factors such as path dependence, bounded rationality, uncertain macroeconomic benefits, and weak globalization pressures. Moreover, while one can find evidence of institutional diffusion across borders, it occurs in multiple directions; not all roads lead to Wall Street.