Corporate governance reform in Japan and South Korea: Two paths of globalization

Ahmadjian, Christina L.; Song, Jaeyong

This paper examines the effect of global pressures on local institutions in a comparative study of corporate governance reform in Japan and South Korea. In the literature on business systems and institutional change, globalization often appears as a monolithic force that either overwhelms all in its path through convergence or is rejected. In this paper, we demonstrate that globalization, in the form of the spread of Anglo-American corporate governance to East Asia, resulted in neither convergence nor rejection, but rather, in two different paths of change. We argue that differences in patterns of reform stemmed from the divergent ways in which local actors-the state, shareholder activists, and large corporations-interacted with each other, and with foreign investors, to respond to external pressures. Two key factors defined these interactions: resource dependencies on global capital, and the way in which local actors framed the concept of corporate governance to fit their ideologies and advance their own interests.

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Academic Units
Center on Japanese Economy and Business
Center on Japanese Economy and Business, Graduate School of Business, Columbia University
Center on Japanese Economy and Business Working Papers, 221
Published Here
February 14, 2011