While unicorns are often associated with Silicon Valley, new data suggests a shift in this trend. This chapter documents the evolution of the global geography of unicorns. It analyses the development of the number of unicorns in both absolute numbers and relative to population and explores their distribution across industries. The analysis dedicates particular attention to the role of emerging markets’ economies. This is timely, as they have recently taken a more prominent role in the global unicorn landscape. Despite the highly skewed global distribution of unicorns, an increasing number of unicorns are found beyond the traditional hotspots. The chapter develops a research agenda and discusses whether targeting unicorns is sensible policy for emerging economies. We argue that the societal returns from targeting unicorns in emerging economies are highly uncertain.

Chapter 2 provides the image of the incentive bargaining of the firm with the state (or government) as the fifth player in the three countries. Section 2.1 compares the industrial policy, which is a typical measure for the state to directly affect the incentives of management, of the three countries. Historically, all three countries have extensively used industrial policy to stimulate industries from a macro perspective and motivate the management of individual firms to take risks. Section 2.2 compares the three different incentive mechanisms of the firm, including the state. The incentive mechanism of the US firms can be expressed as a monitoring image incentive pattern, or the principal-agent model. The incentive mechanism of Japanese firms can be expressed as a bargaining image incentive pattern, or the company community model. The incentive mechanism of Chinese SOEs can be expressed as a party-state model. The incentive mechanism of Chinese POEs can be expressed as an owner management model.

Chapter 8 addresses the complexities of dispute resolution in family businesses, highlighting the dual influence of familial relationships and business dynamics. It begins with a typology of family business conflict, distinguishing between “spillover” disputes from personal grievances and conflicts arising from incompatible business and family values. The chapter examines common legal actions, such as minority shareholder oppression claims, and discusses how the relational aspects of family businesses complicate the determination of reasonable expectations. Additionally, the chapter evaluates the intersection of tax considerations, standing issues, and equity’s role in dispute resolution. Through case studies, including Market Basket’s governance crisis, the chapter demonstrates how courts can adjudicate family business disputes in a manner that respects both business and familial norms.

As a monetary capital provider, creditors play an important role in external governance with shareholders, although they have no legal voting right outside of the bankruptcy process. Chapter 8 will compare the legal institutions and practices regarding the roles of creditors in the three countries by dividing them into ex ante monitoring of solvent firms, renegotiation in financially distressed firms, legal bankruptcy, and debtor directors’ fiduciary duty during the zone of insolvency. In the United States, banks play an active role in the governance of the firm whose business stumbles, by using the loan agreements for the revolving credit facilities. In Japan, contingent governance by main banks as representative of monetary capital providers worked well during Japan’s rapid economic growth era, but was not able to monitor their client companies’ use of free cash flow after the economic growth stopped. Although China is a bank-centered economy and state banks keep a dominant position, Chinese banks play a limited role in monitoring borrowers, especially borrowers who are SOEs, which can be supported financially by the government with cheap credit.

The structure of venture capital funds in the three countries is now basically the same, although there are some unique characteristics in each country. The liquidity of external labor markets and M&A markets influences the risk appetite of entrepreneurs and VCs. Lack of convertible preferred stock resulted in the creation of similar contractual mechanisms to protect VCs as minority stakeholders in Japan and China, Individual venture capitalists in Japanese financial institution backed VCs receive no equity incentive and their LPs are either parent financial institutions or their client companies, which have no incentive to monitor GPs, while LPs of VC funds in the United States are mostly pension funds and university endowments, of which fund managers have a strong incentive to monitor GPs who have strong equity incentive as individuals. Many Chinese LPs are wealthy families and individuals who are more active and eager to participate in management, including investment decisions. Government guidance funds have played an important role.

Chapter 2 explores the distinctive features of family businesses and the governance challenges they pose. Unlike traditional business enterprises that prioritize economic rationality and arm’s-length transactions, family businesses intertwine familial roles and business operations, blending personal relationships with professional responsibilities. This chapter critiques the limitations of the rational-actor model, highlighting how family relationships in business contexts reflect intrinsic rather than merely instrumental value. The chapter further examines how the coexistence of family and business values creates unique governance challenges, especially in balancing family loyalty with merit-based decision-making. A case study of Chase Oil illustrates how successful family firms navigate these complexities. The chapter argues that an effective legal framework for family businesses must acknowledge the overlapping social identities and values that shape both ownership and management decisions.

Chapter 9 explores the concept of stewardship within family-controlled businesses, examining why family ownership endures despite prevailing corporate governance theories favoring dispersed ownership. The chapter challenges traditional law and finance perspectives that attribute insider control solely to private benefits or entrepreneurial vision, proposing instead that stewardship – rooted in a sense of responsibility to family, community, and employees – plays a central role. Through case studies, including Inman Mills, a South Carolina textile company, the chapter illustrates how stewardship can drive long-term strategic thinking, resilience against market pressures, and a commitment to sustaining community ties. The chapter also discusses the role of markets in disciplining family businesses, highlighting the potential for stewardship to coexist with competitive market dynamics. By situating stewardship within broader economic and legal frameworks, the chapter offers a nuanced understanding of why family businesses can thrive even when conventional models predict their decline.

Chapter 7 will compare how shareholders in the three countries monitor management by exit, that is, the threat of hostile takeover, from the perspective of the tradeoff between management autonomy and monitoring management. In the United States, substantial numbers of hostile takeovers have occurred since the 1970s. In Japan, hostile takeover attempts have rarely been successfully done since the majority shareholding of listed companies was stabilized by cross-shareholding networks in the 1960s. After 2020, the control market emerged with several successful hostile takeovers by competitors, and at the same time, hedge fund activism exploded. In China, hostile takeovers are still nearly absent, particularly for SOEs. Regarding the balance between management autonomy and monitoring management, the United States has a relatively buyer-friendly legal system, and Japan has a seller-friendly legal system. China has the UK-type mandatory takeover bid rule, and the black letter law looks to create a UK-type balance between autonomy and monitoring, but the actual implementation of the statutes allows abuses by both buyers and sellers.

This chapter assesses the conditions within entrepreneurial ecosystems and their impact on achieving specific levels of productive entrepreneurial outcome across developed and emerging economies, with special attention to companies that have attained unicorn status. Employing necessary condition analysis (NCA) across sixty countries between 2018–2020, we integrate data from various sources, including the national expert survey (NES) from the global entrepreneurship monitor (GEM), world development indicators (WDI) and private intelligence platforms (Crunchbase, CB Insights and Dealroom.co). Analysis reveals that entrepreneurial framework conditions significantly contribute to high-quality entrepreneurial outcomes like funded start-ups and unicorn companies; however, they are not as critical for other outcomes such as early-stage start-ups and established business ownership. We encourage policymakers to prioritise resources for ecosystem conditions maximising entrepreneurial outcomes, focusing particularly on high-quality entrepreneurship measures like start-ups and unicorns, which traditional metrics may not adequately capture. Findings highlight the positive association of various outcome measures of development, suggesting a correlation between entrepreneurial ecosystems parameters and socioeconomic development and innovation.

Benjamin Means is John T. Campbell Chair in Business and Professional Ethics at the University of South Carolina Joseph F. Rice School of Law. He is the founding director of the United States’ first law-school-based family business program, where he has developed an innovative curriculum to prepare law students to represent family business owners. His scholarly work, published in top journals, has established a new field of legal academic inquiry.

Although it is common for almost all major countries that the board of directors is placed between shareholders and management, both its formal system and role in practice vary among different countries. Chapter 4 will compare the role of independent outside directors in the United States, Japan, and China from the point of view that the board of directors is an intersection of internal governance and external governance. As a formal organizational structure, the US board is a one-tier board with committees and has wide decision-making power over important business decisions. In practice, the US board is a monitoring board, not only a compliance monitor and conflicts of interest solver, but also an efficiency referee. Because of the existence of the company auditor (kansayaku) and the board of company auditors, the Japanese board is often misunderstood as a two-tier board, but it is substantially a one-tier board with an audit committee. The Chinese board system looks like the German type two-tier board with a supervisory board, which includes employee representatives, and a management board, but the supervisory board’s monitoring function is weak in practice.