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This chapter focuses on the competition by states for incorporations. More specifically, it examines three scholarly debates over state competition for incorporations: the “directional” debate, centered around the question of whether firms, if given a choice, will opt for corporate law rules that maximize shareholder value, corporate law rules that maximize managerial benefits, something in between, or something else entirely; the “competition” debate, which is concerned with whether, how, and which states compete for incorporations; and the “federalism” debate, which deals with the desirability of federal corporate law as an alternative to the present regime, where many corporate law rules are determined by the law of the firm’s state of incorporation. The chapter also analyzes the empirical evidence in relation to all three debates.

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