Introduction: The Evolution of the Economic Analysis of Corporate Law

Chapter 1, RESEARCH HANDBOOK ON THE ECONOMICS OF CORPORATE LAW, Claire A. Hill and Brett H. McDonnell, eds., Elgar 2012

Minnesota Legal Studies Research Paper No. 12-21

31 Pages Posted: 5 May 2012  

Claire A. Hill

University of Minnesota, Twin Cities - School of Law

Brett McDonnell

University of Minnesota Law School

Date Written: May 4, 2012

Abstract

This essay is the Introduction to the Research Handbook on the Economics of Corporate Law. After briefly surveying the origins of modern economic analysis of corporate law, it analyzes leading developments in recent decades. Major developments in the law and economics of corporate law have in some cases followed from developments in the law, including changes in fiduciary duty standards, the growth of shareholder activism, the increasing role of independent directors, changes in executive compensation, a new emphasis on various gatekeepers, federalization of corporate governance rules, and globalization. Other developments have followed from trends within economics, including some new ideas in the theory of the firm, greater emphasis on empirical research, a focus on market failures due to incomplete information, the growth of behavioral economics, and some increased emphasis on comparative institutional analysis. The essay speculates that future developments may include a new focus on systemic risk in light of the financial crisis and greater use of empirical research methodologies other than regression analysis. The essay concludes with an overview of the contributions to the volume, which is divided into five Parts: corporate constituencies, insider governance, gatekeepers, jurisdiction, and new theory.

Keywords: law and economics, corporate law, corporate governance

JEL Classification: D21, G30, K22, L21

Suggested Citation

Hill, Claire A. and McDonnell, Brett, Introduction: The Evolution of the Economic Analysis of Corporate Law (May 4, 2012). Chapter 1, RESEARCH HANDBOOK ON THE ECONOMICS OF CORPORATE LAW, Claire A. Hill and Brett H. McDonnell, eds., Elgar 2012; Minnesota Legal Studies Research Paper No. 12-21. Available at SSRN: https://ssrn.com/abstract=2051133

Claire Ariane Hill

University of Minnesota, Twin Cities - School of Law ( email )

229 19th Avenue South
Minneapolis, MN 55455
United States
612-624-6521 (Phone)

Brett H. McDonnell (Contact Author)

University of Minnesota Law School ( email )

229 19th Avenue South
Minneapolis, MN 55455
United States
612-625-1373 (Phone)

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