The Futility of Walls: How Traveling Corporations Threaten State Sovereignty

35 Pages Posted: 18 Apr 2019

See all articles by Darren Rosenblum

Darren Rosenblum

Pace Law School; University of California, Berkeley - Berkeley Center on Comparative Equality & Anti-Discrimination Law

Date Written: April 1, 2019

Abstract

Inversions — mergers in which one firm merges with another abroad to avoid taxes in its home country — have spread as globalization has reduced many of the transactional costs associated with relocating. As firms acquire the power to choose the laws that govern them, they challenge the sovereignty of nation-states, who find their ability to tax and regulate firms depleted. States and firms compete in a game of cat and mouse to adapt to this new global reality. The subversion of state power by these firms reveals the futility of walls, both literal and regulatory. This Essay describes the phenomenon of these “traveling corporations” and analyzes several remedies that could limit future mergers. We conclude by arguing that inversions provoke deglobalization and yet may continue to flourish despite it as firms take the lead in dictating global norms.

Keywords: Corporate Law, Tax Law, Walls, Borders

Suggested Citation

Rosenblum, Darren, The Futility of Walls: How Traveling Corporations Threaten State Sovereignty (April 1, 2019). Tulane Law Review, Vol. 93, No. 645, 2019. Available at SSRN: https://ssrn.com/abstract=3363357

Darren Rosenblum (Contact Author)

Pace Law School ( email )

78 North Broadway
White Plains, NY 10603
United States
914 422 4663 (Phone)

University of California, Berkeley - Berkeley Center on Comparative Equality & Anti-Discrimination Law

Boalt Hall
Berkeley, CA 94720-7200
United States

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