Comparative Corporate Governance and the Theory of the Firm: The Case Against Global Cross Reference

William W. Bratton, Joseph A. McCahery
2000 Social Science Research Network  
Professors Bratton and McCahery take up the main questions addressed by the literature on comparative corporate governance: whether national governance systems can be expected to converge in the near fu ture, and whether the fo cal point of that convergence will be a new, hybrid governance system comprised of the best practices drawn fr om different sys tems. Th is Article advances the view that neither global convergence that eliminates sys temic di f ferences nor the emergence of a hybrid
more » ... practice safe ly can be projected because each national governance system is a sys tem to a significant extent. Each system, rather than consisting of a loose collection of separable components, is tied together by a complex incentive structure. In terdependencies between each system's components and the incentives of its actors create significant barriers to cross reference to and fr om other systems. Th e cross reference hypothesis, zn contrast, presupposes divisible corporate governance institutions-a world zn which one system's
doi:10.2139/ssrn.205455 fatcat:6yzkhn5gyzcp3ohxqxkq2bwkla