Law Commons^™

The Political Economy Of Corporate Law And Governance: American And Korean Rules Under Different Endogenous Conditions And Forms Of Capitalism, Robert J. Rhee

UF Law Faculty Publications

Advanced economies operate under different forms of capitalism and social order. Corporate law is fixed only insofar as a country’s political economy and social organization are static. This article explains why an advanced economy may choose inefficient rules. Korean rules are the product of past industrial development policies and current social-political-economic conditions; endogenous conditions align corporate law with nationalistic sentiments and the public interest. The cost of this policy is diminution of firm value. The benefit is the erection of a plausible distinction between rule- and fact-based control of key corporate groups. This system maintains de facto national control of …