Exam 33: Governance and Corporate Control Around the World

One should expect that the countries having a common law tradition would do a better job protecting

In financial institution-based systems, individual investors hold corporate debt and equity in the following ways:

Briefly explain the term keiretsu.

In which area do households allocate most of their portfolio savings to banks?

Is the United States corporate governance structure more or less responsive to shareholders than most other nations, and why or why not?

The legal system in France is based on the

The following areas have based their legal system on a civil law tradition:

In which country do financial markets play the most important role as sources of corporate funding?

The following are sources of financing for corporations:

The legal system in the United States and the United Kingdom is based on a civil law tradition.

Firms raise funds from financial markets and from financial institutions.

Japan has a "main bank" system where banks and firms have long-standing relationships.

The largest conglomerate in India is the Tata Group.

The idea that a corporation's financial goal is to "maximize stockholder value" is more prevalent in

Individual investors in the United States can play an important part in corporate governance because I.a large fraction of households' portfolio is held directly in equity securities; II.a large fraction of households' portfolio is held in pension funds; III.a large fraction of households' portfolio is held directly in bank deposits

Large business combinations in Japan are normally carried out through reciprocal ownership of common stock. These networks, or keiretsu, involve a large number of diversified companies centered around a large bank, industrial firm, or trading firm. One of the main benefits of this structure is argued to be

The legal systems in France, Germany, and Scandinavia have evolved from a common law tradition.

The idea that a corporation should be run in the interests of the shareholders is embedded in the law in

Suppose that managers were given incentives in the form of restricted stock ownership (i.e., the stock is not easily sold)instead of outright stock ownership. One would expect such firms to have fewer agency problems.

Briefly explain the two important legal traditions in Europe and the United States.