Cross-cultural implications on the legal requirements for corporate governance in China and India Online publication date: Sat, 20-Sep-2014
by Avnita Lakhani
International Journal of Private Law (IJPL), Vol. 5, No. 2, 2012
Abstract: This article looks at two primary issues: 1) how cross-cultural differences in India and China impact the selection of a theoretical framework for effective corporate governance; 2) how cross-cultural differences impact the implementation of legal and institutional requirements of good corporate governance. Theoretically, most corporate governance models appear to concentrate on strictly economic-based factors such as markets and hierarchies. This article argues that in a global economy with rising and developing market players, theorists and academics must look 'outside the box' at non-economic factors, such as legal, social, political and cultural, to construct a more holistic and integrated model of corporate governance, one which allows for cross-cultural differences. Furthermore, inductive cultural studies can provide rich insights and an objective means of determining a corporate governance model. Both China and India share common cultural values and would benefit from implementing a stakeholder model of corporate governance.
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