Abstract

http://ssrn.com/abstract=1291615
 
 

Citations (5)



 
 

Footnotes (132)



 


 



Trust Law, Corporate Law, and Capital Market Efficiency


Robert H. Sitkoff


Harvard Law School

2003

NYU Working Paper No. CLB-06-027

Abstract:     
In both the publicly-traded corporation and the private donative trust a crucial task isto minimize the agency costs that arise from the separation of risk-bearing and manage-ment. But where the law of corporate governance evolved in the shadow of capital-market checks on agency costs, trust governance did not. Thus, even more than that of close corporations, the law and study of private trusts offers an illuminating counterfac-tual a control, as it were for a playful thought experiment about the importance of capital market efficiency to the law and study of public corporations. The animating idea for this essay is that many of the differences on the agency costs frontier between the public corporation and the private donative trust can be roughly attributed to their relative positions in modern capital markets and the related disparity in their residual claimants ease of exit. Among other things, this approach reveals a correlation between the trust law model and the views of corporate law scholars who doubt the ECMH and its implica-tions for corporate governance. The essay also discusses the use of market data for as-sessing breach and damages in corporate and trust litigation and for empirical evaluationof theoretical scholarly analysis in both fields. More generally, comparison of the gov-ernance of the public corporation and the private donative trust brings into view the im-portance of relative price efficiency for the modern approach to corporate governance.

Number of Pages in PDF File: 25

working papers series





Download This Paper

Date posted: October 31, 2008  

Suggested Citation

Sitkoff, Robert H., Trust Law, Corporate Law, and Capital Market Efficiency (2003). NYU Working Paper No. CLB-06-027. Available at SSRN: http://ssrn.com/abstract=1291615

Contact Information

Robert H. Sitkoff (Contact Author)
Harvard Law School ( email )
1575 Massachusetts Avenue
Cambridge, MA 02138
United States
(617) 384-8386 (Phone)
(617) 812-6195 (Fax)
HOME PAGE: http://www.law.harvard.edu/faculty/directory/facdir.php?id=649
Feedback to SSRN


Paper statistics
Abstract Views: 532
Downloads: 101
Download Rank: 8,971
Citations:  5
Footnotes:  132

© 2014 Social Science Electronic Publishing, Inc. All Rights Reserved.  FAQ   Terms of Use   Privacy Policy   Copyright   Contact Us
This page was processed by apollo5 in 0.266 seconds