Comparative Governance Flashcards
tunnelling
fraudulent conveyance
what are private benefits of ownership in a large pyramid
theory of cognitive dissonance (Festinger)
the. concept that people set their core values based on their self interested decisions
justifying something that’s in their self interest to be a “core value” like a teacher going on strike for the “benefit of her students”
leads to corporate governance issues as CEO-adjacent people see things done wrong but adjust their core values to believe that it’s right
Stanley Milgrim obedience to authority experiment and its impact on corporate governance
showed that people willingly obeyed authority when instructed to harm a participant for answering questions wrong
despite cognitive dissonance, they continued forward as told
however, when an opposing view stepped in to speak up, the rate of obedience significantly dropped
If a rival authority appears, then people tend to act less reflexively and starting to think slow
This stems from an idea related to K&T where people act reflexively and just do what they’re used to
what is the share price reaction of a firm buying a corporate jet & the related Q ratio over time
negative share price reaction
lower Q ratio over time
describe the European Industrial policy argument
in the post-war period, much PPE was destroyed so they used direct indsutrial policies to rebuild everything which greatly increased GDP
- some argue that it should be done again but it has never worked since
describe corporate governance in France
many upper class kids go through selective schools and are trained based on a set of core values
graduates work as civil servants first and become CEOs of large firms later on
- boards are made up of ex-civil servants
describe corporatism’s core principles
no competition, can’t own private property, jobs protected, regulated entrry and exit of firms, set wages, prices and output limits
what is import substitution (argentina)
distrust with multi national enterprises led to argentina banning imports and export to MNEs, instead subsidizing local businesses to produce and consume goods domestcially
putting profits in ARG pockets, but this stops the Schumpetter Flow, no copmetition, no innovatoin
what is a high power distance score
inequality is more tolerable and endorsed
extreme inequality is accepted by cultural norms
the higher the power distance score, the more likely a country is to have family firms
is the presence of family firms in corrupt countries due to
