Does the European Company Prevent the 'Delaware-effect'?
Joseph A. McCahery
Tilburg University - School of Law; European Banking Center (EBC); Tilburg Law and Economics Center (TILEC); European Corporate Governance Institute (ECGI)
Erik P. M. Vermeulen
Tilburg University - Department of Business Law; Philips Lighting - Legal Department; Tilburg Law and Economics Center (TILEC); Kyushu University - Graduate School of Law
TILEC Discussion Paper No. 2005-010
The forces of globalization and economic integration have given a fresh impetus to company law reform in Europe. As recent judgments of the European Court of Justice encourage competitive lawmaking within the European Union, discussions about the role of the European Commission in the development of company law abound. Who is responsible for setting the agenda and controlling the legislative outcome? The further harmonization attempts and the introduction of the European Company Statute questions the necessity of EU intervention in the company laws regulated by the member states.
This article analyzes the history of EU company law and locates a stable 'non-competitive equilibrium'. This equilibrium follows from member states' unwillingness to give up their lawmaking authority regarding company law issues. From the outset, member states were determined to prevent the 'Delaware-effect'. Since then, stability has ruled. The agenda-setting in EU company law has changed little during the existence of the EU. Even though the recent enactment of the European Company has triggered discussion about competitive lawmaking, it appears that competitive incentives hardly play a decisive role in the development of company law.
Number of Pages in PDF File: 29
Keywords: Company Law, European Company, Regulatory Competition, Delaware
JEL Classification: H77, K22
Date posted: April 7, 2005