Shareholder Model

CORPORATE GOVERNANCE:
EFFECTS ON FIRM PERFORMANCE AND
ECONOMIC GROWTH by Maria Maher and Thomas Andersson
ORGANISATION FOR ECONOMIC CO-OPERATION AND DEVELOPMENT
© OECD 19992
CORPORATE GOVERNANCE:
EFFECTS ON FIRM PERFORMANCE AND ECONOMIC GROWTH
TABLE OF CONTENTS
SUMMARY.................................................................................................................................................... 3
I. Introduction.......................................................................................................................................... 4
II. Analytical Framework: The Shareholder and Stakeholders Models of Governance........................... 5
II.1 The Shareholder Model ................................................................................................................ 6
II.2 The Stakeholder Model ................................................................................................................ 8
II.3 The Interaction of Corporate Governance with the Institutional and Economic Framework..... 10
III. Corporate Governance in OECD Countries: Strengths, Weaknesses, and Economic Implications12
III.1 Outsider Systems of Corporate Governance .............................................................................. 17
III.2 Insider Systems of Corporate Governance ................................................................................. 24
III.3 A Convergence in Systems?....................................................................................................... 30
IV. Corporate Governance and Performance: The Empirical Evidence............................................... 31
IV.1 Ownership concentration and firm performance ........................................................................ 31
IV.2 Dominant shareholders and the expropriation of minority shareholders.................................... 34
IV.3 The market for corporate control and firm

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