American corporate finance & the wealth of nations, with Donald H Chew

Episode notes

Donald H. Chew, Jr., founding editor of the Journal of Applied Corporate Finance, joins Ross Butler on Fund Shack to discuss the evolution of corporate finance and its impact on national wealth. Based on his latest book, The Making of Modern Corporate Finance, Chew explores the shareholder revolution, Japan’s stagnation, China’s middle-income trap, and private equity’s role in reshaping global markets. A masterclass in corporate & financial governance, offering insights into how corporate finance fuels economic prosperity. The Shareholder Revolution & the 1980s Breakup of Conglomerates Corporate America in the 1970s suffered from inefficiency, with large conglomerates prioritizing stability over investor returns. The 1980s shareholder revolution broke up these inefficient structures, restoring a focus on productivity and capital efficiency, in contrast to Japan’s stagnation. Japan’s Corporate Governance Failure: For three decades, Japan’s economy has stagnated as corporate structures resist shareholder influence and fail to optimize capital allocation. The lack of investor control has slowed productivity and exacerbated demographic challenges, leading to economic decline.

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