Reference no: EM133037937

1. Why is the legal origin (code vs. common law) related to the development of capital markets and ownership concentration across countries?

2. Explain why common law is better for contracting and protecting private property rights than code law?

3. How can law shape a firm in adopting the two different types of business transactions (relationship-based vs. arm's length)?

4. Why was the patron-client relationship so important when Zhang Jian tried to set up Dasheng (from HBR case History: Zhang Jian and the Dasheng Cotton Mills (China))?

5. Explain why Company Law, the concept of going concern, and limited legal liability are so important for the development of modern corporations?

1. What are the five guanxi bases in China?

2. In a culture that focuses on private networks (e.g. Olympus case from HBR and its connected stakeholders), how would the agency problem be different from the U.S. agency problem or agency problem just involving the controlling shareholders and minority shareholders?

3. How is the emphasis on permanent relationships affect firms' contracting in a relational economy? Hint: think about the horizon of the contract.

4. How does the specificity of relationships affect the ability of a Chinese firm to scale up its operations?

5. How are relational contracts different from arm's length standardized contracts? Name the different features in the contracts.

6. Does relational contracting affect a firm's ownership concentration? If so, how?