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Corporate Governance, The Firm and Investor Capitalism

Legal-Political and Economic Views Alexander Styhre, School of Business, Economics and Law, University of Gothenburg, Sweden
The shift from managerial capitalism to investor capitalism, dominated by the finance industry and finance capital accumulation, is jointly caused by a variety of institutional, legal, political, and ideological changes, beginning with the 1970s’ downturn of the global economy. This book traces how the incorporation of businesses within the realm of the state leads to both certain benefits, characteristic of competitive capitalism, and to the emergence of new corporate governance problems emerges. Contrasting economic, legal, and managerial views of corporate governance practices in contemporary capitalism, the author examines how corporate governance has been understood and advocated differently during the New Deal era, the post-World War II economic boom, and after 1980 in the era of free market advocacy.
Extent: 296 pp
Hardback Price: $135.00 Web: $121.50
Publication Date: 2016
ISBN: 978 1 78536 401 3
Availability: In Stock
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  • Business and Management
  • Corporate Governance
  • Economics and Finance
  • Corporate Governance
  • Law - Academic
  • Corporate Law and Governance
The shift from managerial capitalism to investor capitalism, dominated by the finance industry and finance capital accumulation, is jointly caused by a variety of institutional, legal, political, and ideological changes, beginning with the 1970s’ downturn of the global economy. This book traces how the incorporation of businesses within the realm of the state leads to both certain benefits, characteristic of competitive capitalism, and to the emergence of new corporate governance problems. Contrasting economic, legal, and managerial views of corporate governance practices in contemporary capitalism, the author examines how corporate governance has been understood and advocated differently during the New Deal era, the post-World War II economic boom, and after 1980 in the era of free market advocacy.

Covering the theory of the firm from the New Deal era until the post-2008 financial crisis, the book connects contemporary theories with their original legal roots, demonstrating inconsistencies in contemporary understanding. It also points at the differences between legal theory and neoclassical economic theory regarding the theory of the firm. The book examines how the entrenchment of shareholder welfare governance turns a blind eye to legal theory and corporate law, leading to theoretical inconsistencies and practical concerns, and criticises the agency theory argument in favour of unrestricted shareholder welfare governance. A comprehensive review of the literature on corporate governance, both in legal theory and in economics and management studies, is included.

This enlightening and informative book is essential reading for corporate governance scholars, management studies researchers, legal theorists, and business historians.
‘The book makes a strong argument for developing a new view of corporate governance based on mainstream legal theory, management study research, and applied microeconomics. . . . Styhre provides us with much intellectual fodder for the key questions of the new millennium – most importantly, what role the corporation will play in ensuring a vibrant US economic middle-class in an era of contract employees, underemployment, and ongoing automation.’
– Thomas A. Hemphill, Journal of Markets & Morality
Contents Prologue: The Great Recession Durcharbeitung Introduction: The nature of the firm and its governance Part I: Instituting the firm 1. Corporate law and the legal environment of the firm 2. Managerialism, the problem of principal-agent relations, and free market advocacy Part II: Rethinking the firm 3. The agency theory model of the firm and its implications 4. Investor capitalism and the nexus of contract view of the firm: Assessing the consequences Postscript: Neoclassical economic theory and ideology Bibliography Index