Entrepreneurship and Innovation: The Hidden Costs of Corporate Governance in Europe

Mendoza, Jose Miguel; Elst, Christoph Van der; Vermeulen, E.P.M.

doi:10.2139/ssrn.1698352

Cited by 3 publications

(3 citation statements)

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“…For example, Mendoza et al (2010) If one takes these suggestions seriously, the next question is whether such a court should be constructed from scratch, or whether some existing court could be transformed to subsume this function. The role of specialized courts has been discussed in OECD-forums, with one question being whether the Dutch Enterprise…”

Section: About Courts and Specialized Courtsmentioning

confidence: 99%

Preventing Abuse by Controlling Shareholders

Damme¹

2013

JITE

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Section: About Courts and Specialized Courtsmentioning

confidence: 99%

Preventing Abuse by Controlling Shareholders

Damme¹

2013

JITE

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“… 74 For the period 1998–2010: Mendoza, van der Elst and Vermeulen ( 2010 ); for the period 2010–2013: Lafarre ( 2014 ). …”

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Stewardship and Shareholder Engagement in Germany

Ringe

2020

Eur Bus Org Law Rev

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Corporate stewardship holds great promise for the improvement of shareholder engagement and the encouragement of more responsible and long-term oriented value creation. This is particularly true since the outbreak of the global COVID-19 pandemic. Many countries have long adopted a best practice code for the stewardship role of institutional investors and asset managers, but Germany has so far refused to follow that trend. This paper explores the reasons for this reluctance, as well as whether the adoption of a Stewardship Code would still make sense in the regulatory framework of Germany today. Despite the increased presence of shareholder engagement (and even activism), several reasons may be put forward for why lawmakers have refused to adopt a stewardship code. This paper argues that the main political reason for this reluctance lies in the limited geographical reach of such a code, which would primarily be restricted to the (limited) domestic fund industry and would thus be unable to prescribe any meaningful principles to foreign-based asset managers. Still, I argue that the adoption of a code in the German context may make sense, for example to define expectations and to clarify the obligations of investee companies. Most importantly, it would benefit domestic investors that are typically ‘home biased’ and thereby frequently disproportionately invested in domestic funds.

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“…European court has been made before. For example,Mendoza et al (2010) points to important, but hidden cost of strict regulation, concludes that more economic evidence is required before new corporate governance reforms are introduced and suggests that policymakers should focus on existing minimum standards of corporate behavior supported by open norms, which offer more flexibility for courts. Realizing the weaknesses of current courts, these authors also suggest introducing a specialized European court for corporate governance and dispute resolution.…”

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confidence: 99%

Preventing Abuse by Controlling Shareholders

Damme

2012

SSRN Journal

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This paper is a comment on Ronald Gilson and Alan Schwarz "Constraints on Private Benefits of Control: Ex Ante Control Mechanisms versus Ex Post Transaction Review". Together with that paper it will appear in the Journal of Institutional and Theoretical Economics 169 (1) in 2013, in a special issue devoted to Behavioral Theory of Institutions. I argue that the arguments of Gilson and Schwarz are convincing, but that the underlying assumptions may be stronger than the authors suggest. In particular, the G&S paper adopts a US shareholder perspective on corporate governance and is based on standard rationality assumptions. In this comment, I discuss whether and to what extent the recommendations are relevant in the EU context and whether the paper's conclusions are robust when insights from behavioral economics are included.

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Entrepreneurship and Innovation: The Hidden Costs of Corporate Governance in Europe

Cited by 3 publications

References 13 publications

Preventing Abuse by Controlling Shareholders

Preventing Abuse by Controlling Shareholders

Stewardship and Shareholder Engagement in Germany

Preventing Abuse by Controlling Shareholders

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