Chinese Journal of Sociology ›› 2018, Vol. 38 ›› Issue (2): 46-83.

Previous Articles     Next Articles

Financial Globalization and the Transnational Diffusion of Shareholder-Oriented Corporate Governance Institutions: A Sociological Analysis of Corporate Governance Reform in China

YANG Dian   

  1. Institute of Sociology, Chinese Academy of Social Sciences
  • Online:2018-03-20 Published:2018-03-20
  • Supported by:

    This paper was supported by the National Social Science Foundation of China (16BSH075).

PDF

591

Abstract:

Since the rise of financial globalization and American "shareholder capitalism"in the 1980s, the shareholder-oriented corporate governance model has become more and more prevalent around the world. It was widely perceived as the "best" corporate governance model or "international best practices", which has not only impacted the stakeholder-oriented corporate governance model of Germany and Japan, but also shaped corporate governance reform of developing countries and transitional countries like China. The author argues that the adoption of shareholder-oriented corporate governance institutions in China was mainly driven by two endogenous and exogenous factors,and diffused through three mechanisms in two phases. In the first phase, at the transnational level (from America to China), mimetic isomorphism and normative isomorphism are at play. In the second stage, at the domestic firm-level, the government requires companies to adopt new corporate governance institutions through laws, regulations and policies, that is,the mechanism of "coercive isomorphism" has played a leading role. This paper contributes to organizational theory and economic sociology theory by extending the basic postulates of the new institutionalism to the study of international diffusion and isomorphism of organizational practices. While the importance of imitation among network members in the diffusion of organizational practices has often been shown at the interpersonal and inter-organizational (firm) levels,this research offers support for a similar mechanism operating at the international level. Taken together, the findings demonstrate the importance of power (vs. efficiency) in the adoption of organizational practices in general, and the role of the state (vs. financial market) in the international diffusion of American corporate governance practices in particular.Furthermore, the sociological analysis of China's corporate governance reform in this paper is helpful for us to deepen our understanding of China's financial market and listed companies,providing a new perspective different from that given by Economics and Management Science. The analysis has important theoretical and practical significance in reflecting the Western neo-liberal enterprise model and constructing a "modern enterprise system" with Chinese characteristics.

Key words: financial globalization, shareholder capitalism, modern enterprise system, maximization of shareholder value, shareholder-oriented corporate governance