8. Review of Corporate Governance in Emerging Economies from the Perspective of Principal–Principal Conflict

The focus of the paper is on Principal–Principal (PP) conflicts which differ significantly from traditional Principal–Agent (PA) conflicts that dominate the corporate governance discourse in developed economies. In emerging economies, PP conflicts are the dominant form of governance conflicts. PP conflict is a term used to characterize the conflicts between controlling shareholders and minority shareholders. The genesis of this type of conflict is the weak institutional structure prevalent in the emerging economies that results in concentrated ownership in the form of family control and business group structure. Since PP conflicts are the result of completely different corporate dynamics, it requires remedies that differ considerably from the remedies of PA conflicts. This paper reviews the extant literature on PP conflicts with the aim to decipher its characteristics, institutional antecedents, and organizational consequences.