Product market competition
are two kinds of product market competition that are relevant in corporate governance. 1)
Competition in the firm's product markets, and 2) competition in the
product markets of the firm’s owners if they are firms as well. For instance the
product markets of an institutional investor.
Product market competition is of
major importance in corporate governance because it affects the incentives of
the economic efficiency of the companies they manage. A
classic reference on product market competition is Hart
of product market competition on corporate performance and other other
kinds of institutions of relevance for corporate governance.
Table - International
corporate governance: Tentative
characterizations of legal and empirical state of large firm product market competition as of 1980-95: 1) Developing countries. 2) Germany. 3)
Japan. 4) Anglo-American countries. 5) Denmark.
- A simplistic model:
The perfect market economy.