Market Discipline, Information Processing, and Corporate Governance

@inproceedings{Hellwig2005MarketDI,
  title={Market Discipline, Information Processing, and Corporate Governance},
  author={Martin Hellwig},
  year={2005}
}
The paper reviews and assesses our understanding of the notion of “market discipline” in corporate governance. It questions the wholesale appeal to this notion in policy discussion, which fails to provide an account of the underlying mechanisms in terms of theory and empirical analysis. Discipline that is provided by the “market” must be compared to discipline that is provided by other institutions, e.g., intermediaries acting as “delegated monitors”. The comparative assessment depends on (i… CONTINUE READING

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