Deck 4: Taxonomies of Corporate Governance Systems

Question 1

The following statement about the taxonomies of corporate governance systems is correct.

A)The varieties of capitalism literature argues that there is a hierarchy of corporate governance systems.
B)The varieties of capitalism literature is based on the principle of complementarities.
C)Scandinavian law provides weaker investor protection than French law.
D)Electoral systems based on the proportionality rule have stronger investor rights.

Answer 1

B

Question 2

Which one of the following statements is correct?

A)The VOC literature proposes a hierarchy of corporate governance systems.
B)The varieties of capitalism (VOC)literature argues that there is a zero-sum game between employee rights and investor rights, i.e. one can only be improved by weakening the other.
C)Contrary to the taxonomies proposed by the finance and law literature, the VOC literature does not assume that the employee rights can only be improved by reducing investor rights.
D)None of the above.

Answer 2

C

Question 3

Which one of the following statements is correct?

A)Supply-side economics is the exact opposite doctrine to Keynesian economics as it advocates a focus on the supply side of the economy rather than the demand side.
B)Supply-side economics argues against globalisation.
C)US President Ronald Reagan's economic policies were heavily influenced by Keynesian economic theory.
D)None of the above.

Answer 3

A

Question 4

Which one of the following statements about the insider system is correct?

A)Control is dispersed.
B)There is an active market for corporate control and hostile takeovers are a frequent occurrence.
C)Stock markets are large and highly developed.
D)None of the above.

Question 5

Which one of the following statements is correct?

A)Financialisation consists of turning any asset which generates cash flows into a tradable security or a derivative of such a security.
B)Financialisation refers to the increasingly important role of the financial industry and capital markets on a global level.
C)Both A and B are correct.
D)None of the above.

Question 6

According to La Porta et al., ...

A)civil law countries provide greater investor protection.
B)English law countries have weaker investor rights.
C)common law countries provide weaker shareholder protection.
D)None of the above.

Question 7

Recent criticisms of La Porta et al.s' theory on the role of legal families include the following.

A)As La Porta et al. used secondary sources rather than the actual law texts, they have made errors in interpreting the law.
B)The legal family is only a proxy for culture which is much better at explaining common patterns and differences in corporate governance across countries.
C)Some of the criteria that La Porta et al. have retained to measure investor protection are irrelevant whereas some of those that have been omitted are clearly relevant.
D)All of the above are correct.

Question 8

Which one of the following statements about Mark Roe's taxonomy of corporate governance systems is true?

A)Social democracies have more hostile takeover activity.
B)Social democracies will experience a separation of ownership and control in contrast to more conservative countries.
C)Politics drives corporate governance.
D)None of the above.

Question 9

Which one of the following statements is correct?

A)Marco Pagano and Paolo Volpin argue that under majoritarian electoral systems worker rights will be stronger.
B)They assume that there is a zero-sum game between improving worker rights and investor rights.
C)Worker rights will be stronger under proportional electoral systems.
D)Both B and C are correct.

Question 10

Which one of the following statements is correct?

A)The two types of path dependence are structure-driven and rule-driven path dependence.
B)Path dependence refers to the impact of history on current corporate governance arrangements.
C)Both of the above are correct.
D)None of the above are correct.

Question 11

Mark Roe argues that ...

A)politics drives corporate governance.
B)German law is better at protecting investor rights than French law.
C)proportional voting systems have stronger employee rights.
D)None of the above.

Question 12

Which one of the following statements about the Gramm-Leach-Bliley Act of 1999 is correct?

A)This Act removed barriers to capital flows and the movement of citizens across the member states of the European Union.
B)This Act introduced American Depository Receipts (ADRs), enabling foreign firms to cross-list on a US stock exchange.
C)This Act prevented US banks from engaging in both commercial and investment banking.
D)None of the above.