Regulatory Competition and the Market for Corporate Law

• 成果类型: Article
• 署名作者: Eldar, Ofer; Magnolfi, Lorenzo
• 署名单位: Duke University; University of Wisconsin System; University of Wisconsin Madison
• 刊物名称: AMERICAN ECONOMIC JOURNAL-MICROECONOMICS
• ISSN/ISSBN: 1945-7669
• DOI: 10.1257/mic.20180056
• 发表日期: 2020
• 页码: 60-98
• 关键词: incorporation choices; state competition; delaware law; FEDERALISM; RACE; Inattention; INNOVATION; demand; nevada

摘要

This article develops an empirical model of firms' choice of corporate laws under inertia. Delaware dominates the incorporation market, though recently Nevada, a state whose laws are highly protective of managers, has acquired a sizable market share. Using a database of firm incorporation decisions from 1995 to 2013, we show that most firms dislike protectionist laws, such as anti-takeover statutes and liability protections for officers, and that Nevada's rise is due to the preferences of small firms. Consistent with the bonding hypothesis, our estimates indicate that despite inertia, Delaware would lose significant market share and revenues if it adopted protectionist laws.