Corporate Governance, Finance and the Technological Advantage of Nations (Routledge Studies in Global Competition)

331 Pages·2008·1.34 MB·English

by  Andrew Tylecote

Corporate Governance, Finance
and the Technological Advantage
of Nations
There is much debate regarding which countries’ economies have the best
economic systems to encourage economic growth and technological change.
This book is a major contribution to this discussion, connecting the fields of
corporate governance and finance with the field of innovation and technology
and analysing the ways in which countries’ systems of corporate governance
affect firms’ ability to meet the technological challenges of different sectors.
Tylecote and Visintin combine incisive analysis with empirical studies of
systems of corporate governance in the US, Europe, East Asia and China,
demonstrating how these systems vary and how the demands on those who
control and finance industry are changing. The authors argue that while certain
types of system have worked for particular sectors, the technological revolution
through which we are passing demands innovation in corporate governance and
finance. Indeed, this book goes some way to challenge accepted views of best
practice in corporate governance and finance, showing how structures and rules
intended to advance ‘shareholder value’ may undermine it by inhibiting techno-
logical change.
This book will be required reading for students and researchers engaged with
corporate governance and national business systems, as well as those interested
in systems of innovation.
Andrew Tylecote is Professor of the Economics and Management of Techno-
logical Change at the University of Sheffield. Francesca Visintin is Associate
Professor in the Department of Economics at the University of Udine.
Routledge studies in global competition
Edited by John Cantwell
University of Reading, UK
and
David Mowery
University of California, Berkeley, USA
1 Japanese Firms in Europe 8 Strategy in Emerging Markets
Edited by Frédérique Sachwald Telecommunications
establishments in Europe
2 Technological Innovation, Anders Pehrsson
Multinational Corporations
and New International 9 Going Multinational
Competitiveness The Korean experience of direct
The case of intermediate countries investment
Edited by José Molero Edited by Frédérique Sachwald
3 Global Competition and the 10 Multinational Firms and
Labour Market Impacts on Employment,
Nigel Driffield Trade and Technology
New perspectives for a new
4 The Source of Capital Goods century
Innovation Edited by Robert E. Lipsey and
The role of user firms in Japan and Jean-Louis Mucchielli
Korea
Kong-Rae Lee 11 Multinational Firms
The global–local dilemma
5 Climates of Global Competition Edited by John H. Dunning and
Maria Bengtsson Jean-Louis Mucchielli
6 Multinational Enterprises and 12 MIT and the Rise of
Technological Entrepreneurial Science
Spillovers Henry Etzkowitz
Tommaso Perez
13 Technological Resources and the
7 Governance of International Logic of Corporate
Strategic Alliances Diversification
Technology and transaction costs Brian Silverman
Joanne E. Oxley
14 The Economics of Innovation, 22 Entrepreneurship
New Technologies and A new perspective
Structural Change Thomas Grebel
Cristiano Antonelli
23 Evaluating Public Research
15 European Union Direct Institutions
Investment in China The U.S. Advanced Technology
Characteristics, challenges and Program’s Intramural
perspectives Research Initiative
Daniel Van Den Bulcke, Albert N. Link and John T. Scott
Haiyan Zhang and
Maria do Céu Esteves 24 Location and Competition
Edited by Steven Brakman and
16 Biotechnology in Comparative Harry Garretsen
Perspective
Edited by Gerhard Fuchs 25 Entrepreneurship and Dynamics
in the Knowledge Economy
17 Technological Change and Edited by Charlie Karlsson,
Economic Performance Börje Johansson and
Albert L. Link and Roger R. Stough
Donald S. Siegel
26 Evolution and Design of
18 Multinational Corporations and Institutions
European Regional Edited by Christian Schubert and
Systems of Innovation Georg von Wangenheim
John Cantwell and
Simona Iammarino 27 The Changing Economic
Geography of Globalization
19 Knowledge and Innovation in Reinventing space
Regional Industry Edited by Giovanna Vertova
An entrepreneurial coalition
Roel Rutten 28 Economics of the Firm
Analysis, evolution and history
20 Local Industrial Clusters Edited by Michael Dietrich
Existence, emergence and
evolution 29 Innovation, Technology and
Thomas Brenner Hypercompetition
Hans Gottinger
21 The Emerging Industrial
Structure of the Wider Europe 30 Mergers and Acquisitions in
Edited by Francis McGowen, Asia
Slavo Radosevic and A global perspective
Nick Von Tunzelmann Roger Y.W. Tang and
Ali M. Metwalli
31 Competitiveness of New 34 Risk Appraisal and Venture
Industries Capital in High Technology
Institutional framework and New Ventures
learning in information Gavin C. Reid and Julia A. Smith
technology in Japan, the U.S. and
Germany 35 Competing for Knowledge
Edited by Cornelia Storz and Creating, connecting and growing
Andreas Moerke Robert Huggins and Hiro Izushi
32 Entry and Post-Entry 36 Corporate Governance, Finance
Performance of Newborn Firms and the Technological
Marco Vivarelli Advantage of Nations
Andrew Tylecote and
33 Changes in Regional Firm Francesca Visintin
Founding Activities
A theoretical explanation and
empirical evidence
Dirk Fornahl
Corporate Governance,
Finance and the Technological
Advantage of Nations
Andrew Tylecote and
Francesca Visintin
First published 2008
by Routledge
2 Park Square, Milton Park, Abingdon, Oxon OX14 4RN
Simultaneously published in the USA and Canada
by Routledge
270 Madison Ave, New York, NY 10016
This edition published in the Taylor & Francis e-Library, 2007.
“To purchase your own copy of this or any of Taylor & Francis or Routledge’s
collection of thousands of eBooks please go to www.eBookstore.tandf.co.uk.”
Routledge is an imprint of the Taylor & Francis Group, an informa business
© 2008 Andrew Tylecote and Francesca Visintin
All rights reserved. No part of this book may be reprinted or reproduced or
utilised in any form or by any electronic, mechanical, or other means, now
known or hereafter invented, including photocopying and recording, or in
any information storage or retrieval system, without permission in writing
from the publishers.
British Library Cataloguing in Publication Data
A catalogue record for this book is available from the British Library
Library of Congress Cataloging in Publication Data
A catalog record for this book has been requested
ISBN 0-203-93388-5 Master e-book ISBN
ISBN10: 0-415-11221-4 (hbk)
ISBN10: 0-203-93388-5 (ebk)
ISBN13: 978-0-415-11221-5 (hbk)
ISBN13: 978-0-203-93388-6 (ebk)
For all my sons ABT
For Matteo FV

Contents
List of figures xiii
List of tables xiv
Preface and acknowledgements xvii
1 Introduction: the role of corporate governance and
finance in innovation 1
1.1 How do nations get technological advantage? 1
1.2 How can one classify and assess national systems of finance
and corporate governance? 5
1.3 Financing and controlling technological change: the
challenges 8
1.4 The demands of technological change on the finance and
corporate governance system (FCGS) 11
1.5 Who controls firms, what are their objectives, and why
shouldit matter? 15
1.6 Autonomy, stewardship and stakeholders 21
1.7 Technological regimes and technological revolutions 25
1.8 What this book sets out to do 26
2 How sectors vary in their requirements from the
system of corporate governance and finance 31
2.1 Introduction 31
2.2 Opportunity and need for reconfiguration 33
2.3 Visibility and appropriability 34
2.4 Changes over time 35
2.5 How scale matters 36
2.6 The high-technology sectors 37
2.7 The medium-high-technology sectors 50
2.8 Conclusion 60