Enforcement and Corporate Governance
Enforcement more than regulations,
laws-on-the-books, or voluntary codes is key to effective
corporate governance, at least in transition and developing
countries. Corporate governance and enforcement mechanisms
are intimately linked as they affect firms' ability to
commit to their stakeholders, in particular to external
investors. The authors provide a framework for understanding
these links and how they are shaped by countries'
institutional contexts. When the general enforcement
environment is weak and specific enforcement mechanisms
function poorly, as in many developing and transition
countries, few of the traditional corporate governance
mechanisms are effective. The principal consequence in these
countries is a large block-holder, but there are important
potential costs to this mechanism. A range of private and
public enforcement "tools" can help reduce these
costs and reinforce other supplementary corporate governance
mechanisms. The limited empirical evidence suggests that
private tools are more effective than public forms of
enforcement in the typical environment of most developing
and transition countries. However, public enforcement is
necessary regardless, and private enforcement mechanisms
often require public laws to function. Furthermore, in some
countries at least, bottom-up, private-led tools preceded
and even shaped public laws. Political economy constraints
resulting from the intermingling of business and politics,
however, often prevent improvements in the general
enforcement environment, and adoption and implementation of
public laws in these countries.
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Bibliographic Details
| Main Authors: |
Berglöf, Erik,
Claessens, Stijn |
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| Language: | English
en_US |
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| Published: |
World Bank, Washington, D.C.
2004-09
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| Subjects: | ACTUAL COSTS,
ASSET STRIPPING,
ASSETS,
AUDITORS,
AUDITS,
BANK LENDING,
BANK MONITORING,
BANKING REGULATION,
BANKING SYSTEM,
BANKRUPTCY,
BANKRUPTCY LAW,
BROKERS,
CAPITAL MARKETS,
CLEARING HOUSES,
COLLATERAL,
CONTRACT ENFORCEMENT,
CORPORATE CONTROL,
CORPORATE GOVERNANCE,
CORPORATE PERFORMANCE,
COST OF CAPITAL,
DEBT,
DEVELOPED COUNTRIES,
DISCLOSURE,
ECONOMIC GROWTH,
ECONOMICS,
ECONOMIES OF SCALE,
EMERGING MARKETS,
EMPIRICAL EVIDENCE,
EQUILIBRIUM,
EXPROPRIATION,
EXTERNAL FINANCING,
FACTOR MARKETS,
FINANCIAL DEVELOPMENT,
FINANCIAL INSTITUTIONS,
FINANCIAL MARKETS,
FINANCIAL SECTOR,
FINANCIAL STRUCTURE,
FOREIGN FIRMS,
FOREIGN INVESTORS,
GOVERNANCE PROBLEM,
GOVERNMENT INTERVENTION,
HUMAN CAPITAL,
INFORMATION DISSEMINATION,
INSIDER TRADING,
INSTITUTIONAL DEVELOPMENT,
INSTITUTIONAL INVESTORS,
INTERNATIONAL FINANCE,
INVESTMENT BANKS,
INVESTMENT STRATEGIES,
JOINT VENTURES,
JUDICIAL SYSTEM,
JURISDICTIONS,
LABOR MARKETS,
LAWS,
LIABILITY,
LINKAGES,
LIQUIDITY,
LIQUIDITY COSTS,
MARKET ECONOMIES,
MEDIA,
MINORITY SHAREHOLDERS,
NATURAL RESOURCES,
OIL,
OWNERSHIP CONCENTRATION,
POLICY RESEARCH,
POLITICAL ECONOMY,
PRIVATE PROPERTY,
PROPERTY RIGHTS,
PROXY,
PROXY FIGHTS,
PUBLIC POLICY,
RATE OF RETURN,
RATING AGENCIES,
REGULATORY ENVIRONMENT,
RENT SEEKING,
RISK MANAGEMENT,
SECURITIES,
SECURITIES LAWS,
SECURITIES MARKETS,
SETTLEMENT,
SHAREHOLDER VALUE,
SHAREHOLDERS,
SHAREHOLDINGS,
SOCIAL COSTS,
STOCK EXCHANGES,
STOCK MARKET,
STOCK MARKETS,
STOCKS,
SUPERVISORY FRAMEWORK,
SUPPLIERS,
TRADE CREDIT,
TRADEOFFS,
TRADERS,
TRANSACTION COSTS,
TRANSITION ECONOMIES, |
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| Online Access: | http://documents.worldbank.org/curated/en/2004/09/5163974/enforcement-corporate-governance
https://hdl.handle.net/10986/14242
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