The Evolution of Corporate Law: A Cross-Country Comparison

Abstract

Corporate law as it exists in any given country today is the result of roughly 200 years of legal change and legal adaptation. Provisions that today are hailed as indicators for good corporate governance did not exist when the first statutory corporate laws were put in place. This simple insight raises the question about the evolution of corporate law. In this paper we analyze ten jurisdictions representing the three major legal families as well as transplant countries and origin countries to explore the patterns of legal change over time. We find origin countries from common law and civil law families have experienced substantial legal change and adaptation over time. By contrast, legal transplants from both legal families have often retained the transplanted law for decades despite substantial economic change. The area of corporate law where we find the most significant change over time are corporate finance provisions. Provisions concerning corporate governance structures and entry and exit rules are also investigated.

JEL Classification: G3, K2, N2, P5