References (28)


Citations (2)



Delaware's Competitive Reach

Matthew D. Cain

U.S. Securities and Exchange Commission

Steven Davidoff Solomon

University of California, Berkeley - School of Law

March 2012

Journal of Empirical Legal Studies, Vol. 9, Issue 1, pp. 92-128, 2012

Despite its dominance of the market for public company corporate charters, Delaware has come under increasing fire for losing ground to other states in the competition to retain corporate litigation. To test this criticism, we evaluate the selection of governing law and forum clauses in 1,020 merger agreements between public firms from 2004–2008. This sample provides a clean test of the real‐time attractiveness of states' judiciary during the sample period. In contrast to prior research, we find that Delaware's attractiveness to merging parties has increased in recent years. Parties appear to respond to exogenous events, evidenced by the fact that top‐tier legal advisors, foreign acquirers, transactions surrounded by greater financial uncertainty, and larger transactions tend to select Delaware's forum over other venues. We conclude that during our sample period, Delaware was increasingly valued by the corporate actors who influence incorporation choices, and competed strongly for legal products beyond its primary one, the public company charter. This is important because a failure to retain corporate litigation can possibly lead to an erosion in Delaware's prominence in the public company chartering market.

Number of Pages in PDF File: 37

Accepted Paper Series

Date posted: February 16, 2012  

Suggested Citation

Cain, Matthew D. and Davidoff Solomon, Steven, Delaware's Competitive Reach (March 2012). Journal of Empirical Legal Studies, Vol. 9, Issue 1, pp. 92-128, 2012. Available at SSRN: http://ssrn.com/abstract=2006126 or http://dx.doi.org/10.1111/j.1740-1461.2011.01248.x

Contact Information

Matthew D. Cain (Contact Author)
U.S. Securities and Exchange Commission ( email )
United States Securities and Exchange Commission
450 Fifth Street, NW
Washington, DC 20549
United States
Steven M. Solomon
University of California, Berkeley - School of Law ( email )
215 Boalt Hall
Berkeley, CA 94720-7200
United States
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