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The Societas Europaea: Good News for European Firms

31 Pages Posted: 25 May 2009 Last revised: 10 Oct 2010

Horst Eidenmueller

University of Oxford; European Corporate Governance Institute (ECGI)

Andreas Engert

University of Mannheim

Lars Hornuf

University of Bremen - Faculty of Business Studies and Economics; Max Planck Institute for Innovation and Competition; CESifo (Center for Economic Studies and Ifo Institute)

Date Written: July 1, 2009

Abstract

When Council Regulation (EC) No 2157/2001 on the Statute for a European Company (Societas Europaea - SE) became effective on 8 October 2004, it offered publicly traded companies, for the first time, a choice between competing company laws, namely the national law of the company’s home state and the law of the supranational SE. Using an event study methodology, we analyse a unique dataset of publicly traded firms that have announced to re-incorporate under the SE Regulation. We find the re-incorporation decision to have a positive impact on firms’ stock market value. The abnormal returns associated with re-incorporating as an SE increase over the years, which we interpret as the result of declining legal uncertainty and a rising reputational value of the SE corporate form.

Keywords: event study, Societas Europaea, European Company, EC company law, incorporation, charter competition, regulatory competition, legal arbitrage

JEL Classification: G34, G38, K22

Suggested Citation

Eidenmueller, Horst and Engert, Andreas and Hornuf, Lars, The Societas Europaea: Good News for European Firms (July 1, 2009). ECGI - Law Working Paper No. 127/2009. Available at SSRN: https://ssrn.com/abstract=1409555

Horst G. M. Eidenmueller

University of Oxford ( email )

Mansfield Road
Oxford, Oxfordshire OX1 4AU
United Kingdom

European Corporate Governance Institute (ECGI) ( email )

c/o ECARES ULB CP 114
B-1050 Brussels
Belgium

Andreas Engert (Contact Author)

University of Mannheim ( email )

Schloss Westflügel
68131 Mannheim, 68131
Germany

HOME PAGE: http://engert.info

Lars Hornuf

CESifo (Center for Economic Studies and Ifo Institute) ( email )

Poschinger Str. 5
Munich, DE-81679
Germany

University of Bremen - Faculty of Business Studies and Economics ( email )

Bremen, D-28359
Germany
+49 89 20348619 (Phone)

HOME PAGE: http://www.hornuf.com

Max Planck Institute for Innovation and Competition

Marstallplatz 1
Munich, 80539
Germany

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