Twenty years ago, American-style shareholder capitalism, with its focus on maximising shareholders’ value (MSV), was widening its lead (in terms of economic growth) over European-style stakeholder capitalism. Nevertheless, the U.S. economy runs large trade deficits, inequality in income and wealth has risen, and there is a growing disappointment in the ability of American capitalism to deliver on its economic promise of prosperity. Evidence of superior long-run performance of enterprises operating in economies (such as Germany) where the MSV hypothesis is not the norm guiding corporate governance (but co-determination), suggests (at the minimum) that there are approaches to corporate governance which may be superior to MSV. In this thesis, the longer-run impacts of two alternative systems of corporate governance are explored with the aid of two business case studies—performed on General Motors (GM), from the U.S., and Volkswagen (VW), from Germany—with an aim to find the extent to which their diverse systems of corporate governance have contributed to (dis)investments in innovation. It has been found that, unlike the conditions at VW, the lack of a stable decision-making structure; inability to identify and confront competition; high profit-orientation, short-termism, yearly stock buybacks and regulations which permits it, and stock-based remuneration rationalised by the MSV hypothesis; flexible labour markets and downsizing; focus on the development of “general” skills; and aggressive debt financing, have shaped the corporate governance of GM and have affected its innovative capabilities. Moreover, VW—with its strong long-term competence development motive, technocratic managers, and better debt ratios—can be expected to identify and sustain its new (radical) innovation projects and if successful, can aid VW to emerge from any cost-disadvantage. GM can be expected to possess superior proprietary technologies and radical innovations or could be in a path of acquiring them. But, it is likely that with its current low cash margins and riskier credit-risk exposure—as a result of MSV perspective in corporate governance—GM may be placed at a cost disadvantage if the innovations fail or fail to appropriate gains.