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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The ambiguous phrasing of pari passu (equal treatment) clauses in sovereign debt contracts has long baffled commentators. We show that in the presence...
We present a simple model of common ownership in which an investor chooses its stake in competing firms in light of the effects on firm behavior and firm...