Show Summary Details

Page of

PRINTED FROM OXFORD HANDBOOKS ONLINE (www.oxfordhandbooks.com). © Oxford University Press, 2018. All Rights Reserved. Under the terms of the licence agreement, an individual user may print out a PDF of a single chapter of a title in Oxford Handbooks Online for personal use (for details see Privacy Policy and Legal Notice).

date: 17 October 2019

Abstract and Keywords

This chapter examines the theoretical and empirical validity of the “contractarian” theory of corporate governance Beginning with an overview of the contractarian theory and its conceptualization of the relationship between managers and shareholders of a public company, it explains how the theoretical assumptions of the contractarian theory have turned out to be invalid and how the empirical predictions of the theory have not been borne out. The process by which “corporate contracts” develop do not fit the neoclassical model of atomistic competition. As a result, the customization and innovation that the contractarian theory predicts do not occur—either at the IPO stage or at the “midstream” stage when companies are publicly traded.

Keywords: corporate governance, contractarian theory, IPO stage, midstream stage, managers, shareholders, public company, corporate law, corporate charters, corporate contract

Access to the complete content on Oxford Handbooks Online requires a subscription or purchase. Public users are able to search the site and view the abstracts and keywords for each book and chapter without a subscription.

Please subscribe or login to access full text content.

If you have purchased a print title that contains an access token, please see the token for information about how to register your code.

For questions on access or troubleshooting, please check our FAQs, and if you can''t find the answer there, please contact us.