On Takeover Law and Regulatory Competition
Lucian A. Bebchuk
Harvard Law School; National Bureau of Economic Research (NBER); Centre for Economic Policy Research (CEPR) and European Corporate Governance Institute (ECGI)
Harvard Law School; European Corporate Governance Institute (ECGI)
Business Lawyer, Vol. 57, pp. 1047-1068, 2002
Harvard Law and Economics Discussion Paper No. 363, 2002
This article defends, and further develops, our earlier work on regulatory competition and takeover law. We have argued that competition for corporate charters provides incentives to states to protect incumbent managers from hostile takeovers, and that the empirical evidence is consistent with this account. To improve the performance of regulatory competition, we have put forward the possibility of choice-enhancing federal intervention; such intervention would expand shareholder choice, and encourage states to become more attentive to shareholder interests, without imposing any mandatory arrangements. Replying to Jonathan Macey's response to our work in this issue of the Business Lawyer, we show that none of his claims weakens our analysis.
The earlier work which we defend and develop in this paper is "A New Approach to Takeover Law and Regulatory Competition," 87 Virginia Law Review 111-164 (2001). In a related piece ("Federal Intervention to Enhance Shareholder Choice," 87 Virginia Law Review 993-1006 (2001)), we reply to a critique of our work by Steve Choi and Andrew Guzman.
Number of Pages in PDF File: 29
Keywords: Delaware, incorporations, corporate charters, regulatory competition, corporate governance, managers, shareholders, takeovers
JEL Classification: G30, G38, H70, K22
Date posted: May 24, 2002 ; Last revised: May 10, 2009