EconPapers    
Economics at your fingertips  
 

Jurisdictional competition for corporate charters and firm value: a reexamination of the Delaware effect

Anne Anderson (), Jill Brown () and Parveen P. Gupta ()
Additional contact information
Anne Anderson: Lehigh University
Jill Brown: Bentley University
Parveen P. Gupta: College of Business and Economics

International Journal of Disclosure and Governance, 2017, vol. 14, issue 4, 341-356

Abstract: Abstract In this paper, we analyze the Delaware incorporation effect on firm value to determine whether the positive association found by Daines (J Financ Econ 62(3):525–558, 2001) still holds. Analyzing a sample from 1997 to 2013, we find that the relationship between Delaware incorporation and firm value is no longer positive, as found by Daines, and is in fact negative and significantly different from zero. In addition, we find that this negative relationship holds even after controlling for the effects of Sarbanes–Oxley, the financial crisis, and foreign incorporations. We attribute this change to increasing charter competition, both within and outside of the US. However, in line with current governance trends, we propose that Delaware’s popularity may be rooted in director primacy arguments that support Delaware as a state where directors perceive they have autonomy and discretion through the Chancery Court system.

Keywords: Law; Corporate governance; Investor protection; Correlation; Incorporation (search for similar items in EconPapers)
Date: 2017
References: Add references at CitEc
Citations: Track citations by RSS feed

Downloads: (external link)
http://link.springer.com/10.1057/s41310-017-0029-4 Abstract (text/html)
Access to the full text of the articles in this series is restricted.

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:pal:ijodag:v:14:y:2017:i:4:d:10.1057_s41310-017-0029-4

Ordering information: This journal article can be ordered from
https://www.palgrave.com/gp/journal/41310

Access Statistics for this article

International Journal of Disclosure and Governance is currently edited by Michael Alles

More articles in International Journal of Disclosure and Governance from Palgrave Macmillan
Bibliographic data for series maintained by Sonal Shukla ().

 
Page updated 2020-01-08
Handle: RePEc:pal:ijodag:v:14:y:2017:i:4:d:10.1057_s41310-017-0029-4