Bruce Kogut (ed.): The Small Worlds of Corporate Governance. Cambridge, MA: MIT Press, 2012. 388 pp. $42.00, hardcover.
You can read the review by Mark S. Mizruchi of the University of Michigan, available now in the OnlineFirst section of Administrative Science Quarterly.
From the review:
Kogut’s primary interest is corporate governance and, secondarily, its role in economic development. Earlier work by economists had suggested that the primary route to development was a system of free and open markets, underpinned by an active capital market, strong legal protections of shareholder rights, and effective monitoring of management. Although liberalization and privatization occurred worldwide over the past four decades, Kogut argues that nations responded to these forces in very different ways. The outcomes they experienced, however, at least in terms of their ownership and director networks, were often very similar. In other cases, virtually identical levels of liberalization and privatization led to very different outcomes. Kogut’s goal in the book is to account for this convergence and divergence. To do this, he employs two approaches. The first, which he calls “comparing the comparative statics,” involves examining groups of countries that experienced a similar “structural break,” or what is usually termed an exogenous shock. The second, which he refers to as “Can you grow it?” (a phrase from the field of complex systems), involves the examination of network change through simulations, in particular the “rewiring” of the connections among units.
Kogut lays out these arguments in an extensive, wide-ranging introductory essay that is simultaneously an exegesis on organizational, economic, and sociological theory (with a dose of philosophy of science), punctuated with a didactic essay on social network analysis. This chapter, running 50 pages of densely packed text, is by itself worth the price of the book.
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