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The (Misunderstood) Genius of American Corporate Law

11 Pages Posted: 18 Jan 2010  

Robert B. Ahdieh

Emory University School of Law

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In this Reply, I respond to comments by Bill Bratton, Larry Cunningham, and Todd Henderson on my recent paper - Trapped in a Metaphor: The Limited Implications of Federalism for Corporate Governance. I begin by reiterating my basic thesis - that state competition should be understood to have little consequence for corporate governance, if (as charter competition's advocates assume) capital-market-driven managerial competition is also at work. I then consider some of the thoughtful critiques of this claim, before suggesting ways in which the comments highlight just the kind of comparative institutional analysis my paper counsels. Rather than a stark choice between a race in one direction or another, institutional design in corporate law requires a more careful analysis of how precisely state competition benefits the modern public corporation, as well as of its resulting limitations.

Keywords: corporate law, corporate governance, Berle, Means, Cary, Winter, state competition, charter competition, managerial competition, separation of ownership and control, race to the bottom, race to the top, antitakeover, efficient capital markets, managers, federalism

JEL Classification: D21, D21, D61, G18, G32, G38, H11, H25, H73, H77, K22, L22

Suggested Citation

Ahdieh, Robert B., The (Misunderstood) Genius of American Corporate Law. George Washington Law Review, Vol. 77, No. 3, p. 730, 2009; Emory Public Law Research Paper No. 10-90; Emory Law and Economics Research Paper No. 10-57. Available at SSRN:

Robert B. Ahdieh (Contact Author)

Emory University School of Law ( email )

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