ch18(1) - 18-1Chapter 18 Corporate Governance and the...

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Unformatted text preview: 18-1Chapter 18 Corporate Governance and the International Market for Corporate ControlLearning objectivesNational systems of corporate governanceThe international market for corporate control –M&A activity–PrivatizationsThe international evidence on M&A–The winners and losers–Executive turnover and firm performanceButler / Multinational FinanceChapter 18 Corporate governance & the international market for corporate 18-2Corporate governanceCorporate governancerefers to the way in which stakeholders exert control over the corporationInvestment-based ways to obtain controlover another firm’s assets include…–Acquisition of stock–Acquisition of assets–Merger or consolidation–Joint venture or strategic alliance Cross-border mergers and acquisitions are becoming increasingly important National corporate governance systems ✓Commercial banking in the United StatesUniversal banking in GermanyJapan’s keiretsu system✓Corporate governance systemsThe international market for corporate controlThe international evidence on M&AButler / Multinational FinanceChapter 18 Corporate governance & the international market for corporate 18-3International joint venturesMergers and acquisitionsFDI: plant expansionsFDI: new investmentSource: Ernst & YoungButler / Multinational FinanceChapter 18 Corporate governance & the international market for corporate Investment-based market entryNational corporate governance systems ✓Commercial banking in the United StatesUniversal banking in GermanyJapan’s keiretsu system✓Corporate governance systemsThe international market for corporate controlThe international evidence on M&A18-4Corporate governance systemsMarket-basedAustraliaCanadaIrelandU.K.U.S.Bank-basedGermanyJapanFamilies or the StateStateChinaN. KoreaSingaporeFamilyMexicoItalySpainFamily/StateIndonesia S. KoreaSaudi ArabiaButler / Multinational FinanceChapter 18 Corporate governance & the international market for corporate National corporate governance systems ✓Commercial banking in the United StatesUniversal banking in GermanyJapan’s keiretsu system✓Corporate governance systemsThe international market for corporate controlThe international evidence on M&A18-5Corporate governance systemsCountryBank owner-Supervisory Hostile Executive (and system)ship of equityboardacquisitionsturnoverU.S.No directInside managersCommon throughForced by market (market-equity& outside proxy contests thru proxy contestbased)ownershipdirectorsor tender offersor takeoverGermanyUnlimitedOutside directors,Rare – approval Initiated & managed(bank-based)equitybankers, and of lead bank &by the lead bankownershiplabor reps75% of sharesJapanLimitedInside managers,Rare – blocked Initiated & managed(bank-based)equitybankers, keiretsuby share by main bank, ownershipor business cross-holdingskeiretsu or(5% max)partnersbusiness partnersChinaUnlimitedSOEs areRare for SOEs;Initiated & managed (State-run)equitypoliticallyOccasionally forby the government...
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ch18(1) - 18-1Chapter 18 Corporate Governance and the...

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