ABSTRACT
The objective of this chapter is to develop a theoretical framework which explains the prevailing variety of organizational modes of capital allocation and corporate governance in terms of comparative organizational efficiency. The chapter is divided under six main headings:
1 introducing the investment relation as the basic unit of analysis 2 defining investment relation costs as the comparative efficiency
criterion 3 identifying of the relevant dimensions of an investment relation 4 classifying of alternative regulatory environments 5 characterizing of alternative organizational modes of capital
allocation and corporate governance 6 matching of each type of investment relation in an efficiency
discriminating manner with a particular organizational mode of capital allocation and corporate governance.
