Complicating the Comparative Taxonomy: the Impact on Corporate Governance of the Dynamic Interaction of Creditors and Shareholders

The corporate governance literature often focuses on either equity-side or debt-side actors, taking one as a control variable to study the impact of variations in the characteristics of the other. This Article considers how the interplay between the nature debt and equity investments can be analyzed through a theoretical framework to further the understanding of differences in governance outcomes across jurisdictions. Therefore, it builds upon existing literature on controlling shareholders, financial intermediation, and creditor governance to analyze the mirroring setup between controlling and noncontrolling shareholders on the equity side, and private and public lenders on the debt side. It studies the dynamic interaction of these characteristics across jurisdictions where different combinations of debt and equity prevail, before evaluating how this framework can potently explain cross- and intra-jurisdictional variations in governance outcomes.