The Study On Corporate Governance System Diversity Under A Cross-cultural Theory

There are a variety of discrepancies among corporate governance (CG) systems of different countries in the world. Scholars used to apply Path Dependence dynamic process to describe this phenomenon, that is, CG systems have the inclination to maintain their original conditions. This original condition could be triggered by contingent events, and influenced by the complementary factors such as economics, polities, laws and cultures. In fact, these complementary institutions do not work separately. They together influence the corporate governance. And culture, as an informal institution, play a more important role in shaping CG types. It is the source of CG diversity.This paper applied a theory of cross-cultural psychology, cultural value dimensions, to describe the forming process of characteristics of corporate governance. And a definition of culture-cognition path dependence was put forward originally, incorporating the theories of culture and path dependence. It is the values that behind a culture affect the human choosing process. In an original market without considering cultural complementarities, there are two evolutionary outcomes in the end. But when incorporating cultural factors into consideration, the CG characteristic that fit the original culture would be the final choice. What's more, when the culture of one country interacts with other country's cultures, the value's changing process would trigger CG institution changing.The case study of our Independence Director migrating practice makes it clear that when introducing new CG institutions into our country, cultural complementary factors should be taken into account. Only if a complementary and adaptable CG institution is built up, shall it develop well enough and keep a long-lasting favorable economic performance.