Business Ethics as Corporate Governance

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    Abstrakt

    The paper analyses ethical business codes as governance mechanisms, i.e. institutions which facilitate coordination of economic behaviour. Ethical business codes are compared to other social institutions (market solutions, government intervention, the prevailing social ethic), and their efficiency is evaluated in terms of transaction costs. A normative rationale for ethical codes is found when other institutions fail to achieve socially optimal outcomes, in particular when the firm has access to unique information. Some economic incentives are identified which induce firms to commit to socially optimal ethical codes but it is argued that economic forces will not in general be sufficient for optimality.
    OriginalsprogEngelsk
    TidsskriftEuropean Journal of Law and Economics
    Vol/bind11
    Udgave nummer2
    Sider (fra-til)153-163
    Antal sider11
    ISSN0929-1261
    DOI
    StatusUdgivet - 2001

    Emneord

    • Business ethics
    • Corporate governance
    • Institutional economics
    • Market failure

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