Book Description
Research in corporate governance indicates that the relational framework within which firms make business decisions is very different across countries and these differences might be important in explaining differences in real economic phenomena such as growth rates in real output. On the other hand, research in business cycles indicates that many of the stylized facts of business cycles, themselves the result of business decisions that corporate governance presumably influences, are qualitatively similar. The objective of this paper is to see in what ways business cycles are similar and in what ways they are different across the G-7 countries, and whether any differences are related to differences in corporate governance and ownership structures. This research finds that business cycles across the G-7 countries tend to be more similar when comparing economic relationships from the product market where competition and the macroeconomic environment seem all important. On the other hand, business cycles are less similar across the G-7 countries when comparing certain financial relationships, and in certain cases these differences are related to differences in corporate governance and ownership structures.
