Federalism and Takeover Law: The Race to Protect Managers from Takeovers
AbstractThis paper analyzes certain important shortcomings of state competition in corporate law. In particular, we show, with respect to takeovers, states have incentives to produce rules that excessively protect incumbent managers. The development of state takeover law, we argue, is consistent with our theory. States have adopted antitakeover statutes that have little policy basis, and, more importantly, they have provided managers with a wider and more open-ended latitude to engage in defensive tactics than endorsed even by the commentators most favorable to such tactics. Furthermore, states have elected, even though they could have done otherwise, to impose antitakeover protections on shareholders, who did not appear to favor them, in a way that left shareholders with little choice or say. Finally, we conclude by pointing out that proponents of state competition cannot reconcile their views with the evolution of state takeover law---and should therefore reconsider their unqualified support of state competition.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
Bibliographic InfoPaper provided by National Bureau of Economic Research, Inc in its series NBER Working Papers with number 7232.
Date of creation: Jun 2000
Date of revision:
Publication status: published as "Federalism and Corportate Law: The Race to Protect Managers from Takovers." Columbia Law Review, vol. 99, no.5, pp. 1168-1199 (1999)
Contact details of provider:
Postal: National Bureau of Economic Research, 1050 Massachusetts Avenue Cambridge, MA 02138, U.S.A.
Web page: http://www.nber.org
More information through EDIRC
Find related papers by JEL classification:
- G30 - Financial Economics - - Corporate Finance and Governance - - - General
- G34 - Financial Economics - - Corporate Finance and Governance - - - Mergers; Acquisitions; Restructuring; Corporate Governance
This paper has been announced in the following NEP Reports:
You can help add them by filling out this form.
CitEc Project, subscribe to its RSS feed for this item.
- Sergey Stepanov, 2010.
"Shareholder access to manager-biased courts and the monitoring/litigation trade-off,"
RAND Journal of Economics, RAND Corporation,
RAND Corporation, vol. 41(2), pages 270-300.
- Sergey Stepanov, 2007. "Shareholder Access to Manager-Biased Courts and the Monitoring/Litigation Tradeoff," Working Papers, Center for Economic and Financial Research (CEFIR) w0106, Center for Economic and Financial Research (CEFIR).
- Bar-Gill, Oren & Barzuza, Michal & Bebchuk, Lucian Arye, 2002.
"The Market for Corporate Law,"
CEPR Discussion Papers, C.E.P.R. Discussion Papers
3553, C.E.P.R. Discussion Papers.
- Oren Bar-Gill & Michal Barzuza & Lucian Bebchuk, 2006. "The Market for Corporate Law," Journal of Institutional and Theoretical Economics (JITE), Mohr Siebeck, Tübingen, Mohr Siebeck, Tübingen, vol. 162(1), pages 134-160, March.
- Wolfgang Kerber & Stefan Grundmann, 2006.
"An optional European contract law code: Advantages and disadvantages,"
European Journal of Law and Economics, Springer,
Springer, vol. 21(3), pages 215-236, May.
- Wolfgang Kerber, 2006. "An Optional European Contract Law Code: Advantages and Disadvantages," Marburg Working Papers on Economics, Philipps-UniversitÃ¤t Marburg, Faculty of Business Administration and Economics, Department of Economics (Volkswirtschaftliche Abteilung) 200607, Philipps-Universität Marburg, Faculty of Business Administration and Economics, Department of Economics (Volkswirtschaftliche Abteilung).
- Lucian Bebchuk & Alma Cohen, 2002.
"Firms' Decisions Where to Incorporate,"
NBER Working Papers
9107, National Bureau of Economic Research, Inc.
- Bebchuk, Lucian Arye & Cohen, Alma, 2003. "Firms' Decisions Where to Incorporate," Journal of Law and Economics, University of Chicago Press, University of Chicago Press, vol. 46(2), pages 383-425, October.
- Sinha, Rajeeva, 2006. "Regulation: The market for corporate control and corporate governance," Global Finance Journal, Elsevier, vol. 16(3), pages 264-282, March.
- Rajeeva Sinha, 2004. "The role of hostile takeovers in corporate governance," Applied Financial Economics, Taylor & Francis Journals, Taylor & Francis Journals, vol. 14(18), pages 1291-1305.
- Naomi R. Lamoreaux & Jean-Laurent Rosenthal, 2006. "Contractual Tradeoffs and SMEs Choice of Organizational Form, A View from U.S. and French History, 1830-2000," NBER Working Papers 12455, National Bureau of Economic Research, Inc.
- Bebchuk, Lucian Arye & Cohen, Alma, 2002. "Firms' Decisions on Where to Incorporate," CEPR Discussion Papers, C.E.P.R. Discussion Papers 3514, C.E.P.R. Discussion Papers.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: ().
If references are entirely missing, you can add them using this form.