The Influence of Coordination Benefits on Corporate Governance and Accounting Standards

Abstract

So far, the analysis has shown why we were able to observe two different systems of corporate governance emerging and persisting over the last few decades. The resulting implications for corporate governance reforms have been given in chapter 8. The analysis, so far, has focused on two sources of network effects that influence a corporate governance system. These are network effects via capital markets and network effects via regulation. This final chapter completes the assessment of the influence of network effects on corporate governance by looking at a third possible source of such effects. This third source is the benefits that result directly from a coordination of corporate governance approaches between firms. Such coordination benefits are not specific to the dichotomy of the insider system on one side and the outsider system on the other side, as it has been discussed throughout the previous chapters. Hence, coordination benefits are dealt with separately in this chapter.