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Is Shareholder Capitalism a Defunct Model for Financing Development?

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  • Gerald F. Davis

    (Gerald F. Davis is at the Ross School of Business, The University of Michigan, Ann Arbor, Michigan. E-mail: gfdavis@umich.edu)

Abstract

Shareholder capitalism, and the American system of corporate governance that serves as its operating system, has been held out as a model of economic development for emerging markets for the past generation. This article unpacks the origins of this model within the US and argues that the model has had at best mixed success outside the US. Moreover, the fallout from the two financial bubbles of the early 21st century suggests that shareholder capitalism may not work as advertised even within the US. In the wake of the financial crisis, wise policymakers will draw on a diversity of models rather than hewing to the ‘one best way.’

Suggested Citation

  • Gerald F. Davis, 2010. "Is Shareholder Capitalism a Defunct Model for Financing Development?," Review of Market Integration, India Development Foundation, vol. 2(2-3), pages 317-331, August.
    • Handle: RePEc:sae:revmar:v:2:y:2010:i:2-3:p:317-331
    DOI: 10.1177/097492921000200306
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    References listed on IDEAS

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    5. World Bank, 2008. "World Development Indicators 2008," World Bank Publications - Books, The World Bank Group, number 28241.
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