Few areas of business economics are discussed in such a controversial manner as different corporate governance systems. In a globalized age in which the capital markets of industrialized countries have a large operating range and a growing degree of internationalization, the design and regulation activities in this field have become increasingly important. This has triggered a "competition of institutions".
In the current academic discussion, different corporate governance paradigms are being examined, to figure out, which could be the most successful in a market economy in order to attract investors. It considers what system of management of a capitalled company is the most appropriate - in order to provide a location or rather a country - a competitive advantage in competition for global players. It is assumed that the type of the corporate governance system influences the company’s success or even more on the entire national economy.
As reference points, the German and the US model are often being used. Since they are opposed to one another in their paradigmatic and thus embody the exemplary corporate governance system. In addition, since the Cold War and beyond, the US has been a hegemon and has always had a great influence on the economic and financial system worldwide. Germany is regarded as the political and economic core of the most important partner of the USA, the European Union. Both are regarded as a highly developed economic system; their further development will attract attention beyond their national borders.
Although, the aim of corporate governance is identical, the institutional design and the underlying philosophies differ. As of a 1980´s it appears that the German bank-based system cannot meet the needs of the swift progress of financial markets. From the 1990s onwards, especially in the case of some serious legal measures in Germany, a move towards capital market orientation has been taking place. Since the prediction of a system convergence has been considered critical - because they are embedded in a corresponding cultural and socioeconomic system, which makes the transferability of the respective economic paradigms doubtful - this paper tries to examine if these legal regulations triggered a change in the German financial system.
Inhaltsverzeichnis (Table of Contents)
- 1 Introduction
- 2 Why Corporate Governance Matters.
- 2.1 Definition and Intended Purpose.
- 2.2 Theoretical Foundations
- 3 Corporate Governance as a System: Historical and Political Context..
- 3.1 Origins of US Shareholder Capitalism..
- 3.2 Origins of German Stakeholder Capitalism
- 4 Globalization: A Potential for Convergence
- 4.1 Why Convergence?
- 4.2 The German Financial System in Flux.
- 5 Conclusion
Zielsetzung und Themenschwerpunkte (Objectives and Key Themes)
This paper aims to analyze the evolution of corporate governance systems, specifically focusing on Germany's transition towards a market-based system. It examines the historical and political context of both US shareholder capitalism and German stakeholder capitalism, exploring the potential for convergence in a globalized world.
- The development of corporate governance systems
- The historical and political context of US shareholder capitalism and German stakeholder capitalism
- The potential for convergence of corporate governance systems in a globalized world
- The impact of globalization on Germany's financial system
- The role of legal regulations in shaping corporate governance systems
Zusammenfassung der Kapitel (Chapter Summaries)
- Chapter 1: Introduction This chapter sets the stage by highlighting the importance of corporate governance and the ongoing debate surrounding different systems. It introduces the concept of a "competition of institutions" in a globalized world, where investors seek the most successful system for attracting capital. The chapter emphasizes the contrasting models of US and German corporate governance as reference points for comparison.
- Chapter 2: Why Corporate Governance Matters This chapter delves into the definition and intended purpose of corporate governance, exploring the differences in understanding between Anglo-American and German perspectives. It emphasizes the legal framework for management and supervision of companies, particularly focusing on large listed companies. The chapter outlines the two central tasks of corporate governance: ensuring efficiency and determining the distribution of property rights among stakeholders.
- Chapter 3: Corporate Governance as a System: Historical and Political Context This chapter examines the historical and political origins of US and German corporate governance systems. It explores how these systems have developed over time, highlighting the influence of cultural, legal, and economic factors.
- Chapter 4: Globalization: A Potential for Convergence This chapter explores the potential for convergence of corporate governance systems in a globalized world. It examines the motivations behind convergence and analyzes the measures Germany has taken to adapt its financial system to global competition.
Schlüsselwörter (Keywords)
This paper focuses on key concepts such as corporate governance, shareholder capitalism, stakeholder capitalism, convergence, globalization, financial markets, legal regulations, institutional design, and the historical and political context of both US and German corporate governance systems.
- Quote paper
- Alexander Behne (Author), 2015, Corporate Governance, Regulation and Financial Markets. Germany's Pathway to a Market-Based System?, Munich, GRIN Verlag, https://www.grin.com/document/355592
