The Shareholder Wealth Maximization Norm and Industrial Organization

Industrial organization affects the relative effectiveness of the shareholder wealth maximization norm in maximizing total social wealth. In nations where product markets are not strongly competitive, a strong shareholder primacy norm fits less comfortably with national wealth maximization than else...

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Bibliographic Details
Published in:University of Pennsylvania law review 2001-06, Vol.149 (6), p.2063-2081
Main Author: Roe, Mark J.
Format: Article
Language:English
Subjects:
Business structures
Capital markets
Commercial law
Corporate governance
Corporate regulation
Economic aspects
Economic rent
Industrial organization
Industry
Management principles
Monopoly
Monopoly profit maximization
Organization theory
Product markets
Shareholders
Shareholders wealth
Social aspects
Social norms
Stockholders
Symposium: Norms & Corporate Law
Wealth
Citations: Items that cite this one
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Summary:Industrial organization affects the relative effectiveness of the shareholder wealth maximization norm in maximizing total social wealth. In nations where product markets are not strongly competitive, a strong shareholder primacy norm fits less comfortably with national wealth maximization than elsewhere because, where competition is weak, shareholder primacy induces managers to cut production and raise price more than they otherwise would.
ISSN:0041-9907
1942-8537
DOI:10.2307/3312905