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The End of Regulatory Competition in European Company Law?

Andrássy Working Paper Series No 33

28 Pages Posted: 12 Sep 2014  

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)

Julia Lindner

Ludwig Maximilian University of Munich

Date Written: September 9, 2014

Abstract

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

Hornuf, Lars and Lindner, Julia, The End of Regulatory Competition in European Company Law? (September 9, 2014). Andrássy Working Paper Series No 33. Available at SSRN: https://ssrn.com/abstract=2494309 or http://dx.doi.org/10.2139/ssrn.2494309

Lars Hornuf (Contact Author)

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

Julia Lindner

Ludwig Maximilian University of Munich ( email )

Geschwister-Scholl-Platz 1
Munich, Bavaria 80539
Germany

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