The States as a Laboratory: Legal Innovation and State Competition for Corporate Charters
AbstractCorporate law is an arena in which the metaphor of the states as a laboratory describes actual practice, and, for the most part, this is a laboratory that has worked reasonably well. The goal of this paper is to map out over time the diffusion of corporate law reforms across the states. The law-making pattern we observe indicates a dynamic process in which legal innovations originate from several sources, and a period of legal experimentation that tends to identify a statutory formulation that is adopted by the vast majority of states. Delaware and the Model Act quite often work in tandem. But there are occasions when they advance differing legal rules, accounting for some of the diversity in corporation codes that we observe. Prepared for the Conference on Promoting the General Welfare: American Democracy and the Political Economy of Government Performance at the University of Virginia, November 12-13, 2004.
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Bibliographic InfoPaper provided by Yale School of Management in its series Yale School of Management Working Papers with number amz2625.
Date of creation: 01 Apr 2005
Date of revision: 01 Jul 2006
Corporate law; corporate governance; legal innovation; regulatory competition;
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- Bradley, Michael & Chen, Dong, 2011. "Corporate governance and the cost of debt: Evidence from director limited liability and indemnification provisions," Journal of Corporate Finance, Elsevier, vol. 17(1), pages 83-107, February.
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