Institutional Support of the Firm: A Theory of Business Registries

Benito Arruñada
Authors registered in the RePEc Author Service: Benito Arruñada

No 508, Working Papers from Barcelona School of Economics

Abstract: Registering originative business contracts allows entrepreneurs and creditors to choose, and courts to enforce market-friendly "contract" rules that protect innocent third parties when adjudicating disputes on subsequent contracts. This reduces information asymmetry for third parties, which enhances impersonal trade. It does so without seriously weakening property rights, because it is rightholders who choose or activate the legal rules and can, therefore, minimize the cost of any possible weakening. Registries are essential not only to make the chosen rules public but to ensure rightholders' commitment and avoid rule-gaming, because independent registries make rightholders' choices verifiable by courts. The theory is supported by comparative and historical analyses.

Keywords: Property rights; formalization; impersonal transactions; theory of the firm; business registries; starting a business (search for similar items in EconPapers)
JEL-codes: K22 K23 L59 O17 (search for similar items in EconPapers)
Date: 2015-09
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (9)

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Related works:
Working Paper: Institutional support of the firm: A theory of business registries (2010)
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