Corporate Governance, Innovative Enterprise, and Economic Development

William Lazonick

No RP2006-71, WIDER Working Paper Series from World Institute for Development Economic Research (UNU-WIDER)

Abstract: The notion that good corporate governance means maximizing shareholder value derives from the neoclassical theory of the market economy. I explain why this perspective is highly problematic for understanding the operation and performance of the business corporation and hence the institutions that, for the sake of economic development, should govern it. The main problem is that the market-economy perspective cannot comprehend the process of innovation, including the role of the business corporation.

Keywords: Business enterprises; Corporate governance; Economic development; Technological innovations (search for similar items in EconPapers)
Date: 2006
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