The Quiet Revolution

AIIFL-Companies Registry Corporate Law and Governance
Distinguished Lecture Series

The Quiet Revolution: Foreign Ownership and Corporate Governance

13 December 2023

One of the most striking changes in the world’s capitalist economies has been the rise of cross-border share ownership over the last twenty-five years. The talk will document this rise and seek to understand the relationship between this rise and corporate governance. The starting point is an exploration of the factors independent of corporate-governance considerations that favor a global market for securities and those that impede it. The rise in foreign ownership globally can be explained in significant part by the weakening of these impeding factors. The demand outside a country for the shares of its issuers is determined both by how much the forces impeding a global market for securities have weakened and by the corporate governance of the country’s issuers. This observation suggests pathways of causation between increased foreign ownership and improved corporate governance that run in both directions. For each, the weakening of the forces independent of corporate governance that impede a global market for securities acts as a catalyst. As they weaken, foreign ownership increases, leading to improved corporate governance, which in turn leads to increased foreign ownership.

About the Speaker

Merritt B. Fox is Arthur Levitt Professor of Law at Columbia Law School, a Co-Director of the Center for Law and Economic Studies, and a Co-Director of the Program in the Law and Economics of Capital Markets. He is a graduate of Yale College and Yale Law School. He also received a Ph.D. in economics from Yale University. His academic interests are in the areas of corporate and securities law, law and economics, and international securities regulation and comparative corporate law. He practiced law with the New York City firm of Cleary, Gottlieb, Steen & Hamilton and taught at Yale University, Fordham Law School, and Indiana University Law School in Bloomington and the University of Michigan Law School, before joining the Columbia faculty in 2003.

Chair: Professor Say Goo, Faculty of Law, The University of Hong Kong

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