Reincorporation

Randall A. Heron () and Wilbur G. Lewellen
Additional contact information
Randall A. Heron: Indiana University
Wilbur G. Lewellen: Purdue University

Chapter 19 in Encyclopedia of Finance, 2022, pp 729-741 from Springer

Abstract: Abstract Under the state corporate chartering systemCorporate chartering system in the U.S., managers may seek shareholder approval to reincorporate the firm in a new state, regardless of the firm’s physical location, whenever they perceive that the corporate legal environment in the new state is better for the firm. Legal scholars continue to debate the merits of this system, with some arguing that it promotes contractual efficiency and others arguing that it often results in managerial entrenchment. We discuss the contrasting viewpoints on reincorporations and then summarize extant empirical evidence on why firms reincorporate, when they reincorporate, and where they reincorporate to. We conclude by discussing how the motives managers offer for reincorporations, and the actions they take upon reincorporating, influence how stock prices react to reincorporation decisions.

Keywords: Antitake-over; Contractual efficiency; Corporate charter; Corporate law; Delaware; Director liability; Incorporation; Managerial entrenchment; Reincorporation; Shareholders; Takeover defenses (search for similar items in EconPapers)
Date: 2022
References: Add references at CitEc
Citations:

There are no downloads for this item, see the EconPapers FAQ for hints about obtaining it.

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:spr:sprchp:978-3-030-91231-4_19

Ordering information: This item can be ordered from
http://www.springer.com/9783030912314

DOI: 10.1007/978-3-030-91231-4_19

Access Statistics for this chapter

More chapters in Springer Books from Springer
Bibliographic data for series maintained by Sonal Shukla () and Springer Nature Abstracting and Indexing ().