Global Differences in Corporate Governance Systems: Theory and Implications for Reforms

Over the past few decades two different corporate governance systems have evolved. Countries with an "insider system" exhibit a high level of ownership concentration, illiquid capital markets, and a high level of crossholdings. Countries with an "outsider system" are characterized by widely dispersed ownership, liquid sk markets, a low level of inter-corporate crossholdings, and an active market for corporate control.

Markus Berndt explains the observable differences by elaborating on the...