Is it free market or regulated financial systems that underpin Essay - 2

Is it free market or regulated financial systems that underpin long-term economic success and effective corporate governance - Essay Example A divide exists in the global business within the context of financial systems as each economic giant strives to catapult its ideology over the others. Of note, however, is the argument that economic and fiscal strategies are country specific in terms of level of growth, such that bank-based financial systems best suit the transitioning economies such as China. The report presents an analysis of how economic systems affect corporate governance with insights from various countries. A great diversity exists in both the current status of corporate economic systems and the measures to enhance them in most countries. Presumably, the stated diversity is a reflection of the variegated circumstances of every country (Comelli, 2014). The circumstances include the development state of a nation, the relation between government and business, the financial structure inclusive of funds procurement structures, the shareholding structure and the market for talent among others. Of interest are the commonalities that surface in the direction of system improvements. So as to say, the direction of enhancement in governance via mutual supervision and the improvements in mechanisms to this end is a typical feature in most countries with most countries endeavouring to enhance corporate systems. All this aim at maximising long-term corporate value based on the perspective of an array of stakeholders (Leijonhufvud, 2012). Nevertheless, it is worth noting that the approaches to enhanc ing corporate governance differs in relation to a countrys economic ideology as earlier mentioned. For instance, a capitalistic economy would approach governance from a different viewpoint compared to a command-based economy. From theory, it is widely known that command economies dictate that the government makes the decision on the goods and service to be produced, coupled with their