The Market for Corporate Law

Oren Bar-Gill, Michal Barzuza and Lucian Bebchuk ()

Journal of Institutional and Theoretical Economics (JITE), 2006, vol. 162, issue 1, 134-160

Abstract: This paper develops a model of the competition among states in providing corporate law rules. Such competition is shown to produce optimal rules with respect to issues that do not have a substantial effect on management's private benefits but not with respect to issues that have such an effect. We analyze why a dominant state such as Delaware can emerge, as well as the price that this state will set and the profits it will make. The results of the model can help explain the existing empirical evidence. They also highlight the importance of the rules governing reincorporation and the potential benefits of giving shareholders the power to make reincorporation decisions.

JEL-codes: G30 G38 H70 K22 (search for similar items in EconPapers)
Date: 2006
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Citations: View citations in EconPapers (13)

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Related works:
Working Paper: The Market for Corporate Law (2002)
Working Paper: The Market for Corporate Law (2002)
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