The New Palgrave Dictionary of Economics

2018 Edition
| Editors: Macmillan Publishers Ltd

Corporate Governance

  • Luigi Zingales
Reference work entry
DOI: https://doi.org/10.1057/978-1-349-95189-5_2416

Abstract

Introduced in the mid-1980s, the term ‘corporate governance’ can be defined as the set of conditions that shapes the ex post bargaining over the quasi-rents generated by a firm. The incomplete contracts approach has been very successful in explaining the corporate governance of entrepreneurial firms and also some important features of large corporations, such as allocation of ownership to the providers of capital who are dispersed, and the importance of internal organization. Aspects that remain to be investigated include the role of the board of directors, interaction between different mechanisms of corporate governance, and the normative implications of the approach.

Keywords

Asymmetric information Bargaining Bilateral monopoly Coase theorem Contractual governance Control rights Corporate governance Firm, theory of Free-rider problem Human capital Incomplete contracts Mechanism design Nexus of contracts view of the firm Property rights view of the firm Quasi-rent Risk aversion Takeovers 
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Copyright information

© Macmillan Publishers Ltd. 2018

Authors and Affiliations

  • Luigi Zingales
    • 1
  1. 1.