Lecture 8

Question 1

Agency theory has identified three models of corporate control:

Answer 1

1. Managerial control
2. Blockholder control (Blockholders retain tight control, thus able to exert influence over management.)
3. Shareholder/External control (Relies on number of different market-oriented mechanisms.)

Question 2

Financial systems. 2 systems:

Answer 2

1. Bank-oriented systems (Bank play central role in corporate monitoring)
2. Capital market-oriented systems (Characterized by equity finance and markets for corporate control.)

Question 3

3 perspectives of Economic & Management

Answer 3

1. Agency Theory
2. Financial systems
3. Stakeholder theory

Question 4

The legal paradigm -> explaining coss-national comparisons by:

Answer 4

1. Establishing the boundaries of property rights
2. Defining the quality of law based on legal family origins
3. Engaging in new forms of regulation such as soft law