The New Palgrave Dictionary of Economics

2018 Edition
| Editors: Macmillan Publishers Ltd

Corporations

  • Randall Morck
Reference work entry
DOI: https://doi.org/10.1057/978-1-349-95189-5_289

Abstract

A corporation is an artificial person with many of the rights of a biological one. The first business corporations pooled the savings of many individuals to permit ventures on a scale none could afford individually. Most large American and British corporations lack controlling shareholders; the consequent lack of monitoring and control gives rise to corporate governance problems reflecting the private benefits of control. The view that corporations should be run to maximize shareholder conflicts in many countries with the actual legal duties of corporate officers, and collides with evidence that stock prices are sometimes set by investors with incomplete information.

Keywords

Agency costs Corporate governance Corporations Limited liability Monitoring Noise traders Private benefits of control Stock markets Time inconsistency 

JEL Classifications

M1 
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Copyright information

© Macmillan Publishers Ltd. 2018

Authors and Affiliations

  • Randall Morck
    • 1
  1. 1.