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change would, as argued below, require change in
labour and management practices, because of the
‘complementarities’ in the system, and is therefore 17 There is also a view, forcefully argued by Gibson (2000), that the corporate-governance system is directly responsible for
low returns to shareholders’ wealth and that the so-called ‘Big Bang’ reforms of the financial system do not address the specific
governance features which are responsible for this. In Gibson’s view the reforms may increase financial-sector efficiency, but will
not contribute to economic performance until they directly tackle structures which allow managers to concentrate on objectives
other than maximizing shareholder returns.
According to them, out of 142 banks 45 would need to leave the industry to achieve this. 13 OXFORD REVIEW OF ECONOMIC POLICY, VOL. 16, NO. 2 unlikely. Suto (1999) finds evidence for this type of
partial change. She describes the increasing role of
institutional investors, but notes that their features
differ from those of their US counterparts in so
far as aspects of relational finance are being
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This note was uploaded on 02/03/2014 for the course ECON 204 taught by Professor Devero during the Summer '13 term at American University of Sharjah.
- Summer '13