TILEC Discussion Paper No. 2005-010
29 Pages Posted: 7 Apr 2005
Date Written: March 2005
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.
Keywords: Company Law, European Company, Regulatory Competition, Delaware
JEL Classification: H77, K22
Suggested Citation: Suggested Citation
McCahery, Joseph A. and Vermeulen, Erik P. M., Does the European Company Prevent the 'Delaware-effect'? (March 2005). TILEC Discussion Paper No. 2005-010. Available at SSRN: https://ssrn.com/abstract=693421 or http://dx.doi.org/10.2139/ssrn.693421
By John Armour