Beyond Competition for Incorporations

47 Pages Posted: 13 Sep 2006

See all articles by Ehud Kamar

Ehud Kamar

Tel Aviv University - Buchmann Faculty of Law; European Corporate Governance Institute (ECGI)


This Article documents and analyzes a powerful form of regulatory competition - competition for investments - that has transformed national corporate laws in the European Union in recent years. Unlike competition for incorporations, competition for investments shapes corporate law when firms cannot easily incorporate outside the jurisdiction in which they operate. These dynamics are not unique to the European Union. They characerized early nineteenth-century state lawmaking in the United States, and may well characterize lawmaking today outside the European Union. High political payoffs await successful participants in the competition for investments, which enables them to overcome opposition that can stifle competition for incorporations. These payoffs, together with the fact that no single jurisdiction can monopolize the market for investments, can drive multiple jurisdictions - including large ones - to compete. Allowing firms to incorporate abroad, as recent European Court of Justice rulings require, may or may not breed competition for incorporations. But so long as the existing competition for investments does not lose steam, the effect on firms will be the same. Judging from the reforms this competition has produced thus far, the effect will continue to be positive.

Keywords: Regulatory Competition, Corporate Law, Corporate Governance, European Union, Comparative Corporate Law, Race to the Top, Race to the Bottom, Securities Law

JEL Classification: G30, G38, H25, H40, H60, K22, L13, R58, F21, F22

Suggested Citation

Kamar, Ehud, Beyond Competition for Incorporations. Georgetown Law Journal, Vol. 94, p. 1725, 2006; USC Law Legal Studies Paper No. 05-13; ECGI - Law Working Paper No. 42/2005. Available at SSRN: or

Ehud Kamar (Contact Author)

Tel Aviv University - Buchmann Faculty of Law ( email )

Ramat Aviv
Tel Aviv 69978, IL
972-3-6407301 (Phone)

European Corporate Governance Institute (ECGI)

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

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