The stock market, the market for corporate control and the theory of the firm: legal and economic perspectives and implications for public policy

Simon Deakin and Ajit Singh

MPRA Paper from University Library of Munich, Germany

Abstract: Abstract It is argued here that – contrary to current conventional wisdom – an active market for corporate control is not an essential ingredient of either company law reform or financial and economic development. The absence of such a market in coordinated market systems during their modern economic development was not an evolutionary deficit, but an effective and positive institutional arrangement. The economic and social costs associated with restructuring driven by hostile takeover bids, which are increasingly seen as prohibitive in the liberal market economies, would most likely harm the prospects for growth in developing and transition systems.

Keywords: stock market; company law reform; economic development; institutional arrangement; developing and transition systems (search for similar items in EconPapers)
JEL-codes: D0 F0 G1 K0 K2 (search for similar items in EconPapers)
Date: 2008-05-31
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (10)

Published in Bjuggren, P., and Mueller, D.C., (eds.) The Modern Firm, Corporate Governance and Investment, Elgar Publications (2009): pp. 185-222

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Related works:
Chapter: The Stock Market, the Market for Corporate Control and the Theory of the Firm: Legal and Economic Perspectives and Implications for Public Policy (2009)
Working Paper: The Stock Market, the Market for Corporate Control and the Theory of the Firm: Legal and Economic Perspectives and Implications for Public Policy (2008)
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Persistent link: https://EconPapers.repec.org/RePEc:pra:mprapa:53792

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