| This thesis applies the incomplete contract approach to studying the corporate governance in two cases: Chinese banking and U.S. franchising, both of which are issues of great significance from either academic or industrial perspective, but researches on them are still far from enough.;First, a wave of centralizing control rights has been widely observed in Chinese banking recently. Based on a two-state incomplete contract model, we show that it's actually a reaction to the following four facts---the opening up of the banking market, the reform of going public, the increasing serious financial frauds and the persistent high ratio of non-performing loans---which happen almost at the same time.;Second, the mixed governance structure as well as the uniform and time-invariant linear contract in franchising also confuses many economists. This thesis establishes a two-period double-sided moral hazard model to study the dynamic decision making on governance structure and contracting of a franchise chain. Our results suggest that both resource scarcity theory and agency theory work but carry different weights in different stages along the whole life. Moreover, the accumulation of branding value brings helps remove the diversification of contracting across outlets as well as phases in the long run.;Following this logic, we conduct an empirical analysis on the strategic interactions among franchise chains. Using data of 351 U.S. franchise chains from 43 sectors in 2005, we find significant evidence for spatial effects among franchise chains. Specifically, the coexistence of the complementary strategy in governance structure and the substituting strategy in contracting is consistent with the observed competition behavior and duopoly industrial structure in franchising. |
