Takeovers in China: the case against uniformity in corporate governance

Abstract

Corporate governance has attracted enormous attention both in the area of law and in the area of financial economics. In comparative corporate governance studies, many people have devoted their energy to finding a best corporate governance model. I argue that a functional analysis does not support the view that there is a single best model in the world. I further use the transplantation of an English style takeover law into China to explain that the importation of foreign law is not always based on careful analysis whether the imported foreign law is the best in the world. Furthermore, I discuss the subsequent adjustment of the transplanted English takeover law to the takeover market in China to show that the transplantation of foreign law is subject to local political and economic conditions. If there is no best corporate governance model and the transplantation of foreign law into other countries with different social and political background does not achieve similar objectives, the search for a best corporate governance model is misguided.