The 'Societas Europaea': A Network Economics Approach

Abstract

This article applies network economics to a particular aspect of the statute of the Societas Europaea (SE). The statute allows companies that decide to use the SE form to choose between a two-tier organisational structure (supervisory organ and management organ) and a one-tier organisational structure (administrative organ). By applying the theory of network economics to company law, the article firstly shows that path dependency may arise in the choice of the adopted structure on the basis of the past national regulation. Secondly, the article shows that to overcome this path dependency the incorporation theory would be superior to the real seat theory as provided for by the statute of the SE.

Keywords: European Company statute, Company Law, board structure, path dependency, renvoi technique, company's freedom of establishment, real seat theory, incorporation theory, agency costs, contract law, network economics

JEL Classification: G3, K22