Title: Cross-cultural implications on the legal requirements for corporate governance in China and India

Authors: Avnita Lakhani

Addresses: School of Law, City University of Hong Kong, 83 Tat Chee Avenue, Kowloon Tong, Hong Kong

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.

Keywords: Geert Hofstede; China; India; corporate governance; cross-cultural differences; cross-cultural implications; legal requirements; institutional requirements; economic factors; markets; hierarchies; global economy; market players; non-economic factors; politics; legal factors; social factors; political factors; cultural factors; holistic models; integrated models; cultural studies; common values; cultural values; stakeholder models; codes; private law.

DOI: 10.1504/IJPL.2012.046058

International Journal of Private Law, 2012 Vol.5 No.2, pp.136 - 156

Published online: 20 Sep 2014 *

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