Corporate governance in transition countries
Year: 2000 Volume: 50 Issue: 2 Pages: 97-112
Abstract: The author examines theoretical issues of the relationship between investor (owner) and manager, and cites empirical literature that supports the importance of corporate governance to transition countries. In summary, owners need managers for specific human capital and managers need owners for funds?the corporate governance system enables owners to secure returns on investment; if the system is faulty, firms will lack capital. Ownership matters because owners hold residual rights to property. Transition economies have tried different yet unsuccessful privatization techniques. Their failures are due mainly to the corresponding neglected reform of legal and institutional frameworks. OECD principles should serve to guide transitional economies? reforms of corporate governance.
JEL classification: G3, P31
Keywords: corporate governance; transition
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