Why did financial keiretsu develop in Japan, but not in Germany and the United States? Why is bank intermediation more dominant in Germany and Japan than in the United States? What are the advantages and disadvantages of each system? Capital Markets and Corporate Governance in Japan, Germany and the United States answers these and related questions

"This book goes back to a symposium held at the Max Planck Institute for Foreign Private and Private International Law in Hamburg on May 15-17 1997"--P. [v].

Significant increases in regulatory competition have sharpened the comparative awareness of advantages of different national models of political economy, governance and regulation. The most important change in this regard is a shift in governance from state to the market. The transition from corporatist governance to market governance poses a daunting challenge to regulators and academics. This book addresses these challenges in a comparative and interdisciplinary perspective, including the world's three leading economies and their legal systems: the EU, the U.S., and Japan.

The increased globalization of production processes and the integration of the world's financial markets have placed considerable pressures on companies to reevaluate their governance structures. These structures, which vary from country to country, affect everything from financial fluidity and competitiveness to rules on insider trading, takeover, and accounting and disclosure practices. Should a single model of corporate governance be adopted as a world standard? In this book, part of the Integrating National Economies series, Mitsuhiro Fukao argues against the impulse to adopt a single system of corporate governance. He provides a comprehensive comparison of corporate governance structures in France, Germany, Japan, the United Kingdom, and the United States, outlining the advantages of each type of structure and analyzing the important behavioral differences among them. He explains the order of importance of various stakeholders - creditors, top executives, core employees, and shareholders - the cost of capital, and the use of labor in each country. Given the different advantages of the various systems and their deeply rooted institutional backgrounds, Fukao contends that it is neither desirable nor feasible to adopt a single model of governance as the world standard. Instead, each country should allow various complementary forms of governance in order to create healthy competition among companies and more efficient corporate structures.

The papers in this volume were presented in Budapest at the 20th Colloquium of the Société Universitaire Européenne de Recherches Financières (SUERF), arranged in association with the Robert Triffin-Szirák Foundation. Each paper deals with a different aspect of the characteristics of and trends in corporate governance. The three main topics are: Corporate governance of financial institutions; Corporate governance as exerted by financial institutions; Financial instutions as participants in the transfer of corporate governance. £/LIST£ The structure of financial markets and institutions has a significant impact on the ways in which the power to manage corporate resources is allocated. The relative roles of different types of owners and the legal framework within which they operate are currently in a state of flux throughout Europe. Financial integration in the European Union, the transition to open market economies in Central and Eastern Europe and privatization, have a profound effect on the behaviour and influence of different enterprises. This collection of papers demonstrates the range of aspects of corporate governance in a world characterized by rapid technological, political and institutional change which is currently concerning researchers and practitioners. The authors come from a wide number of countries and disciplines, and include people from leading banks and corporations, public officials and academics, providing different perspectives on corporate governance, financial markets and global convergence in eastern and western Europe. Their contributions will be of considerable interest to academics in the fields of finance and banking, monetary economics and macro-economics, and also to professionals in banks, securities houses, corporate treasuries, pension funds, consultancies, law firms, central banks and regulatory bodies.

This book carefully examines the effects of changes in the corporate governance structure on corporate behavior or company performance, using micro-data from listed companies in Japan. The author found that in Japan the introduction of stock options had neither a positive impact on profitability nor the negative side effects of promoting risk-taking behaviors. Furthermore, he found that corporate diversification and division of corporations showed negative impacts on profitability. The corporate governance structure of Japan has exhibited a large change from the second half of the 1990s to the present. There have been institutional reforms involving enterprise law, such as the introduction of stock options and the removal of the ban on holding companies. With respect to the ownership structure of a company, discernible trends are that the equity holdings of financial institutions and business corporations have fallen while the presence of foreign stockholders has risen. These trends are often pointed out as signs that the Japanese corporate governance structure has been approaching the American model and that this will energize Japanese firms. The author contradicts common academic theories, however, and concludes that the formation of the corporate governance which emphasizes the agency problem between shareholders and corporate managers is inadequate. He suggests that an institutional arrangement for a corporate governance system that values a variety of stakeholders' interests is greatly needed and concludes that perspectives on maximizing surplus values for various stakeholders and distributing the surpluses appropriately among the stakeholders will become increasingly important for the purpose of managing corporations.

This book explores the rationalities and functions of securities markets and takeover activities. Focusing on the Chinese experience of utilizing the securities market as an effective mechanism of corporate control, this volume analyses the future development of China's financial market in the era of economic globalization. Providing an overview of the historical development of the securities market and a literature review of the economic functions of stock markets, Securities Markets and Corporate Governance also examines the legal regimes governing securities markets and takeovers in some leading corporate economies including the US, Germany, Japan and the UK. This volume then focuses on the Chinese experience, proposing a model which balances internal corporate governance and external market control for China.