The study of corporate governance has expanded both its theoretical and its empirical scope. We define governance broadly to include the social organization of firms and their relations to their suppliers, customers, competitors,and states. This review examines both economic and sociological theories to evaluate their efficacy at accounting for the comparative data on firms. Our review of the comparative literature suggests that there is no evidence of convergence across societies toward a single form of governance, and that this is mainly a function of three factors: the timing of entry into industrialization and the institutionalization of that process, the role of states in regulating property fights and rules of cooperation and competition between firms, and the social organization of national elites. The theories that function best are those that consider political, institutional, and evolutionary factors as causal. This is a cautious conclusion as many of the theories have not been evaluated because of the difficulty in producing comparative measures.


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  • Article Type: Review Article
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