Richard Holden

UNSW Business School

University of New South Wales


Professor Holden’s research focuses on contract theory, organizational economics, law and economics, and political economy. He has written on topics including network capital, political districting, the boundary of the firm, incentives in organizations, mechanism design, and voting rules. He is currently editor of the Journal of Law and Economics and is the founding director of the Herbert Smith Freehills Initiative on Law & Economics at UNSW.

Voting History

Statement Comments
The COVID-19 pandemic has permanently changed how companies should think about business strategy. Disagree “Business strategy always took account of, among other things, the need to balance “just in time” considerations with “just in case” considerations. Supply chain and inventory management may change after the pandemic. But the strategic considerations are the same. The optimal weight accorded to different factors has arguably changed, though.”
The COVID-19 pandemic will lead companies to relocate infrastructure and employees away from dense urban locations. Disagree “The positive effect of access to high-human-capital workers is likely to dominate the benefits of being in a less dense location in the event of a pandemic. Firms may well respond to the current crisis by pushing governments toward better response planning and prevention.”
The California Consumer Privacy Act will undermine the targeted advertising market by giving consumers the right to opt out of allowing companies to sell personal data to third parties. Agree
In the wake of recent climate-related disasters and related events, such as the bankruptcy of PG&E, corporations are now planning for the increased operational risks and potential liabilities caused by climate change. Agree “It is clear that there has been a marked upward shift in concern about corporate liability for climate-related events due to, e.g., shareholder class-action lawsuits. What exactly caused that shift is less clear to me, but it will be an important part of law and corporate governance going forward.”
Antitrust policy should intervene more decisively to limit the scope of large technology platforms. Strongly Disagree “Platforms operate in markets with network externalities. A significant benefit to consumers comes from such platforms having large market share. Moreover, most current platforms have very limited pricing power, so consumers do not seem harmed by market share per se. I would focus more on data ownership and privacy concerns.”
U.S. regulations have been rolled back in a number of areas, including emissions standards and clean water. Companies will decide to voluntarily adhere to rules that closely resemble the original standards. Strongly Disagree “Voluntary compliance puts firms at a competitive disadvantage, absent some coordination device like an industry standard. State law can also play a crucial role, as California has shown.”
The Business Roundtable’s new Statement on the Purpose of a Corporation indicates a shift away from shareholder value maximization as the sole purpose of the corporation and toward a broader view of value creation.
This shift will have material impact on the well-being of U.S. workers.
“First, it's completely unclear that this is a genuine sentiment. Second, there have always been instrumental reasons — even under the Friedman view — for corporations to care about workers and other stakeholders. Happy workers are more productive, which leads to more profits. Companies that are seen to be socially responsible attract more customers, all else equal, and so on.”
In the next decade, we will see the first sustainably profitable private commercial activities in space. Disagree “Profitability seems pretty far away given the current state of development of the industry. And given the first-mover advantages, I suspect loss-making will be tolerated for a substantial period of time.”
Introducing 5G networks 3-5 years ahead of other countries will give Chinese firms an advantage. Agree “I think it depends on how strong the network externalities are and the degree to which 5G technology once installed can be replaced with superior technology.”
The increase in stock market volatility that began in 2018 will last for another three to five years. Neither Agree nor Disagree “There are good reasons — perhaps most notably U.S.-China tensions — for a lot of investor fear at the moment. For that to continue uninterrupted for several more years would be sufficiently damaging that it would involve a serious failure of the political process. Yet, it is hard to argue that political processes are working well globally.”
A hard Brexit will have a significant negative impact on many businesses, even if they do not have a U.K. or European presence. Agree “The dislocation and uncertainty caused will cascade through supply chains and networks of firms, regardless of their own direct geographical presence.”
China is no longer the most attractive growth opportunity for Western multinationals. Neither Agree nor Disagree “Demand in China is clearly softening, but given secular stagnation in advanced economies, it is unclear what the attractive alternatives are.”
In the next five years, the blockchain will have a transformative effect on finance in emerging markets. Agree “I see blockchain as an enhanced contracting technology, and it is in areas where contracts work less well that it will have the most impact. Emerging-market financial contracting is a leading example. There is, however, a great deal of uncertainty about what might occur.”
In the absence of a carbon tax, industry self-regulation can help mitigate the worst fallout from climate change. Strongly Disagree “We’ve seen what happens without a carbon tax — a complete failure to address climate change. Industry ‘self-regulation’ also does nothing on the consumer side. A carbon dividend plan, like that of the Climate Leadership Council, is the most pragmatic way forward in addressing climate change and compensating individuals, while maintaining international competitiveness.”
Amazon’s new $15 per hour minimum wage will force other companies to follow suit. Agree “As a big employer, the upward pressure on wages will make other employers compete for workers. In addition, this might well provide ‘air cover’ for moves to increase state and city minimum wages in various parts of the country — an issue in the last presidential campaign.”
Restrictions on skilled immigration will cause US firms to to shift more operations overseas. Strongly Agree “Skilled immigration — combined with sophisticated capital markets — has been at the heart of American dominance in the new economy. It is also vital in engineering and other fields that could move offshore.”
Uber has to develop self-driving cars in the next 10 years in order to remain viable. Disagree “They either need to do that to reduce costs, or raise prices. But the price hike required to make Uber profitable is not prohibitive.”
A trade war will be more disruptive to business than to consumers. Agree “In the short run, it will be very disruptive to business (as we have already seen), but eventually that will flow through to consumers.”