The End of Regulatory Competition in European Company Law?
Andrássy Working Paper Series No 33
28 Pages Posted: 12 Sep 2014
Date Written: September 9, 2014
In this article, we analyze regulatory competition in company law in the European Union (EU). By examining the empirical evidence, we conclude that regulatory competition, which is triggered by legal arbitrage and the competitive pressure exerted by national lawmakers, has run out of steam in the EU. Unlike in the United States, both language barriers and double accounting obligations for branches have hampered entrepreneurs from engaging in legal arbitrage. As a result, a necessary precondition for horizontal regulatory competition is absent. Furthermore, vertical regulatory competition is not on the agenda of national legislators, as the Statute for a European Company is largely based on national company laws. Revising the national company law therefore improves the supranational competitor as well and destroys the incentives for national legislators to engage in vertical regulatory competition.
Keywords: regulatory competition, charter competition, legal arbitrage
JEL Classification: G38, K22
Suggested Citation: Suggested Citation