Legal Form and Corporate Outcomes: Evidence from the Societas Europaea

We examine firms' adoption of the Societas Europaea (SE), a supranational corporate form introduced in 2004, to study how legal structure affects corporate decisions and shareholder outcomes. At the end of 2024, SE companies accounted for more than 25% of the EURO STOXX 50 index. Adopters are more likely to be family-controlled firms with higher operating growth and market performance. Following adoption, firms attract greater foreign investor ownership and increase their cross-border acquisitions outside Europe, which is consistent with signaling a global identity. However, markets react negatively to SE implementation, except when headquarters relocation accompanies the change, and postadoption information asymmetry increases. Our evidence suggests that while the SE structure enhances contractual flexibility and global positioning, it also gives considerable latitude to CEOs and blockholders, with uncertainty about subsequent decisions and their consequences for shareholders.