Corporate group

About: Corporate group is a research topic. Over the lifetime, 1747 publications have been published within this topic receiving 46868 citations.

Corporate Law or the Law of Business? Stakeholders and Corporate Governance at the End of History

Abstract: Corporate law is said to be witnessing the end of history. The long battle between the conservative, private, shareholder-wealth-maximization school of corporate legal thought and the progressive, public, stakeholder-protection/social responsibility school is now over and the victor, it is claimed by conservatives and progressives alike, is the former. This article argues that the private, shareholder-wealth-maximization school's victory is more illusory than real, and depends on a distortedly narrow view of what constitutes corporate governance. Offering a legal history of how the progressive-inspired ideals of stakeholder protection and corporate social responsibility through mandatory legal rules have shaped the law affecting corporations, this article uncovers two patterns which caution against a rush to declare the ultimate triumph of shareholder primacy. The first pattern is that progressives have successfully influenced several important areas of corporate law, such as the allowance of charitable giving and adoption of constituency statutes. These corporate law victories, however, have had notably mixed results; while sometimes helping stakeholders, they have also expanded managerial discretion and thus permitted self-dealing and opportunism. A second pattern is that progressives have been tremendously successful in shaping laws outside of corporate law but that nevertheless regulate fundamental features of corporate behavior in the name of stakeholders. From securities and labor law reforms in the New Deal to the environmental and consumer protection laws of the 1960s and 1970s, progressives have won a diverse and broad array of mandatory legal rules designed to limit corporate conduct perceived as harmful to non-shareholder constituencies. These various bodies of law - what might be termed the law of business - are forceful shapers of the choices corporate management can make about basic operational and organizational decisions. These patterns suggest that today's progressives might find more success changing laws external to corporate law rather than altering fiduciary principles. They also suggest that claims about the "end of history" and the triumph of shareholder primacy depend on an artificially narrow view of the law affecting corporate management. Whatever its explanatory power in corporate law, shareholder primacy is far from an accurate description of the law of business or of corporate practice.

Blurred Boundaries between Firms, and New Boundaries within (Large Multinational) Firms: The Impact of Decentralized Networks for Innovation

Abstract: Changes in the environment for international business activities have facilitated more open networked formations, both within and between firms. The spread of more open networks for innovation is increasingly blurring the boundaries between firms. Yet in contrast, more open relationships within large multinational corporations imply that some new boundaries are being correspondingly erected between different sub-units of the firm. A critical feature of more open structures is that internal and external networks have become more closely connected to one another.Keywords: Theory of the firm. Internal and External networks, Open networks, Innovation, Open innovation, Multinational corporationsJEL Classification: D21, F23, L14, O32I. IntroductionTo explain the existence of the firm as a mode of economic organization and coordination (although not the heterogeneity of firms), transaction cost theorists have sometimes drawn a clear and sharp distinction between the apparently purely hierarchical coordination of economic activity within the firm, and the apparently purely non-hierarchical coordination of activity between firms or between firms and other actors, at arm's length through market relationships (by extension of the analysis of Coase 1937). This approach is designed to establish whether a given set of exchange relationships is more efficiently conducted within firms in general, or instead in markets. In the simplest version of this story, there are clear and distinct boundaries between firms and markets (and hence between firms themselves, which are connected essentially just through markets), and no relevant boundaries or sub-divisions within firms.In the Schumpeterian literature, attention shifted to the role of the firm as a continuous creator of knowledge ttirough localized search efforts in and around production, which better explains firm heterogeneity (Nelson and Winter 1982; Rosenberg 1982; Nelson 1991, 2008). However, such problem-solving efforts often call forth knowledge exchanges between firms, and between firms and non-firm actors. If the flows of knowledge between firms, and the extent to which firms draw upon external capabilities rises sufficienuy, then the boundaries between firms may begin to become blurred. In large firms the evolutionary trajectories or paths of corporate technological learning also involve knowledge creation across various divisions or business units, and in multinational corporations (MNCs) they have increasingly involved knowledge creation both at home and in their foreign subsidiaries, and so knowledge often needs to flow within as well as between firms.In this latter context, the barriers to knowledge exchange between different units of a large firm can become as much of an issue as the boundaries between firms, and in particular a tension may develop between the local inter-organizational networking relationships of an intra-firm unit, and its wider international networking relationships with other parts of its corporate group. Partly as a result of this line of research on international networks for knowledge creation or innovation (Hedlund 1986; Cantwell 1995), it has become apparent that such international business networks frequently need to be comprised and to connect both internal MNC networks (usually, across national borders) and various kinds of inter-firm networks (often arranged around a subsidiary within some local or regional geographical area) (Castellani and Zanfei 2006; Cantwell and Mudambi 2011).The rise of so-called vertical specialization In some industries has helped reduce the role of in-house RD Mowery 2009; Adams, Brusoni, and Malerba 2013). This change implies a shift towards a more open structure of inter-firm network relationships, and a decline in the relative significance of any unitary pyramid-like structure of organizational hierarchy in the coordination of activity in the MNC. …

What Do Corporate Default Rules and Menus Do? An Empirical Examination

Abstract: Much of corporate law consists of non-mandatory statutes. While scholars have examined the effect of non-binding corporate law from a theoretical perspective, almost no studies explore the real-world impact of these laws. This paper empirically examines the impact of non-mandatory state antitakeover statutes. Several conclusions emerge. Despite its non-binding nature, corporate law makes an enormous difference in outcomes, contradicting those who claim that corporate law is trivial. Two types of non-mandatory corporate laws have particularly important effects. Corporate default laws that favor management are considerably less likely to be changed by companies than default laws favoring investors, supporting those who believe that corporate default laws can ameliorate asymmetries in incentives or bargaining power between managers and investors. Corporate menu laws - opt-in laws that are drafted by the state but do not apply as default rules - also facilitate the use of some provisions, supporting those who believe that non-mandatory corporate law reduces transaction costs, such as the cost of updating corporate charters to reflect developments in the economy.

Business group affiliation and firm performance during institutional transition

Abstract: We investigate the performance implications of business group affiliation over a longitudinal period to capture the effects of institutional transitions. Drawing from the institutional voids and ma...