chapter  8
16 Pages

Stock markets and nancial capitalism

WithAndrew Smith, Kevin D. Tennent

This chapter examines the historical relationship between corporate governance and nance by examining the historical development of nancial capitalism and the stock market, with a view to demonstrating the contemporary relevance of business-historical research on this topic. In recent years, academics, policymakers and businesspeople have debated the complex relationship between nancialization, corporate governance and the ideology of shareholder value (Westlake, 2013, pp. 326-343). Many academics blame nancialization and the rise of shareholder value ideology for a range of ills that include the post-1980 stagnation in US median living standards, the wave of scandals that prompted the passage of the SarbanesOxley Act, and the Global Financial Crisis of 2007-9 (Dore, 2008; Lazonick, 2011). The intensication of cross-border M&A activity involving countries with very dierent corporate governance systems, such as the famously ill-fated DaimlerChrysler merger, also focused attention on comparative corporate governance (Gilson, 2001; Martynova and Renneboog, 2011; Sudarsanam and Broadhurst, 2012). The ongoing battles over corporate governance are intense because the right to control a sizeable proportion of GDP is at stake (Gourevitch and Shinn, 2005). In sum, corporate governance is one of the major issues confronting our time.