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Simin Gao and Christopher (Chao-Hung) Chen

This chapter examines multi-level transnational business governance interactions (TBGIs) amongst schemes regulating global derivatives markets. It employs theories of coercive, mimetic and normative isomorphism to explain why Western governance models dominate, why governance models vary between the futures and over-the-counter (OTC) markets, and why East Asian state and market actors sometimes resist Western models. Futures exchanges worldwide adopt similar governance techniques, illustrating the forces of mimetic and normative isomorphism. The monopoly of the International Swaps and Derivatives Association (ISDA) scheme over the governance of the over-the-counter (OTC) market evidences mimetic isomorphism. After the global financial crisis, both the OTC and futures regimes were disrupted by the G20’s coercive isomorphism, which consolidated Western dominance but generated resistance by some Asian regulators and exchange operators. The authors emphasize not just asymmetric Western power, but also the agency of Asian state and market actors who resist Western models to protect local interests.