Comparison of Law, Legal Transplants and International 'Legal Fashion' in German and Japanese Corporate Law

Droit japonais, droit français, quelle réforme? (Special Issues of the Journal of Japanese Law, No. 13), pp. 185-209, Béatrice Jaluzot, ed., Carl Heymanns Verlag, 2020

Max Planck Private Law Research Paper No. 20/19

27 Pages Posted: 16 Dec 2020

See all articles by Harald Baum

Harald Baum

Max Planck Institute for Comparative and International Private Law; European Corporate Governance Institute (ECGI)

Abstract

Comparison of law has always shaped or at least influenced legislation to varying degrees either directly or indirectly, and it continues to do so all the more in today’s arena of globalization and universal availability of comparative legal information. Where foreign concepts are integrated into national laws, one speaks of legal transplants. There is a heated discussion as to whether a reception of foreign legal institutions is actually feasible in a sensible way.
Today’s national regulators seem obliged to navigate a kind of regulatory Scylla and Charybdis. On the one hand, they have to conform to the expectations of the global investment community (as to what constitute internationally perceived “good” corporate governance standards along the lines of
Anglo-American practices) if they want to attract capital in the international financial markets. They have to comply, in other words, with the latest international “legal fashion”. At the same time, however, they face the task of designing an optimal regulatory architecture suited for their national markets with their path-dependent institutional frameworks.
This dual obligation may cause frictions if the global standards and the given institutional set-up derive from different regulatory and organizational traditions. In such a case it is far from certain whether conforming to the international expectations actually improves corporate governance in the given jurisdiction. Rather, the regulator may feel forced to adopt regulatory standards, i.e. the prevailing “legal fashion”, which are unnecessary or even unsuitable when viewed from the national perspective. As all regulation comes with a price tag of compliance costs and a crowding out of potentially better alternative solutions, the outcome may be suboptimal.

Note: This contribution is published in the Max Planck Private Law Research Paper Series with the generous and exceptional permission of the Journal of Japanese Law.

Keywords: Comparison of Law, Legal Transplants, “Legal Fashion”, From Corporate Law to Corporate Governance, Corporate Governance Codes, Independent Directors, Regulatory Tools

Suggested Citation

Baum, Harald, Comparison of Law, Legal Transplants and International 'Legal Fashion' in German and Japanese Corporate Law. Droit japonais, droit français, quelle réforme? (Special Issues of the Journal of Japanese Law, No. 13), pp. 185-209, Béatrice Jaluzot, ed., Carl Heymanns Verlag, 2020, Max Planck Private Law Research Paper No. 20/19, Available at SSRN: https://ssrn.com/abstract=3745059

Harald Baum (Contact Author)

Max Planck Institute for Comparative and International Private Law ( email )

Mittelweg 187
D-20148 Hamburg
Germany

European Corporate Governance Institute (ECGI) ( email )

c/o the Royal Academies of Belgium
Rue Ducale 1 Hertogsstraat
1000 Brussels
Belgium

Do you have a job opening that you would like to promote on SSRN?

Paper statistics

Downloads
42
Abstract Views
147
PlumX Metrics