ABSTRACT
In the 1990s, the literature on corporate governance began to compare the governance structures of business corporations in different parts of the world, and to examine their evolution across time. This literature debated the extent to which corporate governance processes were path dependent, that is, influenced by local, and often temporary, conditions during formative periods (Bebchuk and Roe 1999). Closely related to that question was whether or not increased global competition in products and security markets would lead to convergence in corporate governance, as all corporations attempt to minimise the costs of debt and equity capital attributable to agency costs (Hansmann and Kraakman 2000). The likelihood of convergence depends, amongst other things, on the extent to which local institutions provide comparative advantages that are incapable of transplantation or emulation (Gilson 1996).
