Shareholder value and corporate governance: some tricky questions |
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Authors: | Michel Aglietta |
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Affiliation: | 1. W.Martineau@bristol.ac.uk |
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Abstract: | Shareholder value is not a new idea. But it entails a shift in control over businesses with far-reaching macro-economic consequences. They are mostly apparent in the USA. The required financial return spurs a momentous equity price appreciation which discourages private saving. Meanwhile, the achievement of a financial profitability consistently above the economic rate of return on real capital induces a rising leverage cum share buybacks. The financial dynamic is highly procyclical and generates a financial fragility which questions the hypothetical advantage of private pension funds over pay-as-you-go retirement systems. |
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Keywords: | Shareholder Value Corporate Governance Growth Regime Leverage Wealth Accumulation |
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