Economic Analysis of Corporate Law
Prepared for Encyclopedia of Law and Economics (Alain Marciano and Giovanni B. Ramello, Eds, Springer), 2020
20 Pages Posted: 30 Apr 2020
Date Written: April 10, 2020
The economic analysis of corporate law applies the concepts and tools of microeconomics to the study of the legal rules, regulations and practices that govern the formation and operation of business corporations, most notably as regards the rights and duties of directors, officers, shareholders, and creditors. The literature has focused mostly on publicly-traded corporations, but the analytical framework extends to the simpler cases of close corporations and limited liability companies and the more complex case of corporate groups. This article outlines the foundations of the economic analysis of corporate law, contrasts the classic approach with more recent functional scholarship, and briefly discusses the law and economics of three specific issues: limited liability, managerial liability, and takeovers.
Keywords: Economics of corporate law, theory of the firm, functional approaches, comparative institutional analysis, limited liability, managerial liability, takeovers
JEL Classification: D21, G34, K22, L21
Suggested Citation: Suggested Citation