#07-39
Stakeholder Capitalism, Corporate Governance and
Firm Value
Franklin Allen, Elena Carletti and Robert Marquez, August 2007
For an updated version of this paper, please see #09-28
Abstract: We consider the advantages and disadvantages of stakeholder-oriented firrms that are
concerned with employees and suppliers as well as shareholders compared to shareholder-
oriented firms. Societies with stakeholder-oriented firrms have higher prices, lower output, and can have greater firm value than shareholder-oriented societies. In some
circumstances, firms may voluntarily choose to be stakeholder-oriented because this
increases their value. Consumers that prefer to buy from stakeholder firms can also
enforce a stakeholder society. With globalization entry by stakeholder firms is relatively
more attractive than entry by shareholder firms for all societies.
Keywords:
JEL classifications:
