IDEAS home Printed from https://ideas.repec.org/a/bpj/ajlecn/v2y2011i1n5.html
   My bibliography  Save this article

International Jurisdictional Competition under Globalization: From the U.S. Regulation of Foreign Private Issuers to Taiwan's Restrictions on Outward Investment in Mainland China

Author

Listed:
  • Tsai Chang-hsien

Abstract

Drawing a lesson from the story that the Sarbanes-Oxley Act drives away foreign issuers and then their physical exit provokes a change in the U.S. regulation of non-U.S. issuers, this article takes as another case study the phenomenon that Taiwanese firms list shares overseas, to further test how usual law market demand and supply forces (or underlying exit and voice rights) interplay under international jurisdictional competition. Put simply, both cases of the U.S. and Taiwan significantly elaborate that law market forces underlying international jurisdictional competition are similarly at work even on both sides of the Pacific Ocean. Specifically, globalization strengthens the mobility of international production factors, and thus lowers firms' costs of exiting from a given jurisdiction, which also fuels international jurisdictional competition for mobile firms or capital. Therefore, on the demand side of the international law market, if a regulating jurisdiction ignores business demands and imposes excessive regulation, firms would exit physically or threaten to exit in response. This means that the buyer side of the law market starts to operate and then sparks the seller side. On the international supply side, other jurisdictions as sellers would compete for these exiting firms' corporate charters, listings and other related economic transactions by providing cost-effective regulatory products, to secure greater benefits to the local economy. Such economic exits send out signals to those in the political marketplace within the regulating jurisdiction, and thus activate interest group competition, or the domestic supply side. In consequence, firms, via these law market forces, exert pressure on the regulatory government to engage in a quest for more legal flexibility, or to liberalize unnecessarily excessive regulation.

Suggested Citation

  • Tsai Chang-hsien, 2011. "International Jurisdictional Competition under Globalization: From the U.S. Regulation of Foreign Private Issuers to Taiwan's Restrictions on Outward Investment in Mainland China," Asian Journal of Law and Economics, De Gruyter, vol. 2(1), pages 102-102, April.
  • Handle: RePEc:bpj:ajlecn:v:2:y:2011:i:1:n:5
    DOI: 10.2202/2154-4611.1010
    as

    Download full text from publisher

    File URL: https://doi.org/10.2202/2154-4611.1010
    Download Restriction: For access to full text, subscription to the journal or payment for the individual article is required.

    File URL: https://libkey.io/10.2202/2154-4611.1010?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Mihir A. Desai, 2009. "The Decentering of the Global Firm," The World Economy, Wiley Blackwell, vol. 32(9), pages 1271-1290, September.
    2. Roberta Romano, 1998. "Empowering Investors: A Market Approach to Securities Regulation," Yale School of Management Working Papers ysm74, Yale School of Management.
    3. anonymous, 2007. "China's banking sector," Asia Focus, Federal Reserve Bank of San Francisco, issue Mar.
    4. Lundin, Nannan & Sjöholm, Fredrik & He, Ping & Qian, Jinchang, 2007. "FDI, Market Structure and R&D Investments in China," Working Paper Series 708, Research Institute of Industrial Economics.
    5. Karlsson, Sune & Lundin, Nannan & Sjöholm, Fredrik & He, Ping, 2007. "FDI and Job Creation in China," Working Paper Series 723, Research Institute of Industrial Economics.
    6. Xinhua He & Yongfu Cao, 2007. "Understanding High Saving Rate in China," China & World Economy, Institute of World Economics and Politics, Chinese Academy of Social Sciences, vol. 15(1), pages 1-13, January.
    7. Julian Chang & Steven M. Goldstein, 2007. "Introduction: The WTO and Cross-Strait Economic Relations," World Scientific Book Chapters, in: Julian Chang & Steven M Goldstein (ed.), Economic Reform And Cross-Strait Relations Taiwan and China in the WTO, chapter 1, pages 1-41, World Scientific Publishing Co. Pte. Ltd..
    8. Banzhaf, H. Spencer & Walsh, Randy, 2006. "Do People Vote with Their Feet? An Empirical Test of Environmental Gentrification," RFF Working Paper Series dp-06-10, Resources for the Future.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Simon Wong, Chak Keung & Gladys Liu, Fung Ching, 2011. "A study of pre-trip use of travel guidebooks by leisure travelers," Tourism Management, Elsevier, vol. 32(3), pages 616-628.
    2. Zhang, Yingjie & Zhang, Tianzheng & Zeng, Yingxiang & Cheng, Baodong & Li, Hongxun, 2021. "Designating National Forest Cities in China: Does the policy improve the urban living environment?," Forest Policy and Economics, Elsevier, vol. 125(C).
    3. Becht, Marco & Mayer, Colin & Wagner, Hannes F., 2008. "Where do firms incorporate? Deregulation and the cost of entry," Journal of Corporate Finance, Elsevier, vol. 14(3), pages 241-256, June.
    4. Njangang, Henri & Nembot Ndeffo, Luc & Noubissi Domguia, Edmond & Fosto Koyeu, Prevost, 2018. "The long-run and short-run effects of foreign direct investment, foreign aid and remittances on economic growth in African countries," MPRA Paper 89747, University Library of Munich, Germany.
    5. Shyam Sunder, 2001. "Standards for Corporate Financial Reporting: Regulatory Competition Within and Across International Boundaries," Yale School of Management Working Papers ysm245, Yale School of Management, revised 01 Apr 2002.
    6. Gu, Xinhua & Tam, Pui Sun & Li, Guoqiang & Zhao, Qingbin, 2020. "An alternative explanation for high saving in China: Rising inequality," International Review of Economics & Finance, Elsevier, vol. 69(C), pages 1082-1094.
    7. Breuer, Matthias, 2017. "How Does Financial-Reporting Regulation Affect Market-Wide Resource Allocation?," Working Papers 270, The University of Chicago Booth School of Business, George J. Stigler Center for the Study of the Economy and the State.
    8. Avi-Yonah Reuven S., 2011. "Citizens United and the Corporate Form," Accounting, Economics, and Law: A Convivium, De Gruyter, vol. 1(3), pages 1-56, December.
    9. Guttentag Michael, 2007. "Accuracy Enhancement, Agency Costs, and Disclosure Regulation," Review of Law & Economics, De Gruyter, vol. 3(2), pages 611-641, December.
    10. Shang-Jin Wei & Xiaobo Zhang, 2011. "The Competitive Saving Motive: Evidence from Rising Sex Ratios and Savings Rates in China," Journal of Political Economy, University of Chicago Press, vol. 119(3), pages 511-564.
    11. Dennis Tao Yang & Junsen Zhang & Shaojie Zhou, 2012. "Why Are Saving Rates So High in China?," NBER Chapters, in: Capitalizing China, pages 249-278, National Bureau of Economic Research, Inc.
    12. Sebastian Dullien, 2009. "Central Banking, Financial Institutions And Credit Creation In Developing Countries," UNCTAD Discussion Papers 193, United Nations Conference on Trade and Development.
    13. Riccardo Fiorentini, 2011. "Global Imbalances, the International Crisis and the Role of the Dollar," Working Papers 18/2011, University of Verona, Department of Economics.
    14. Jean-Paul Fitoussi & Francesco Saraceno, 2008. "The intergenerational content of social spending : health care and sustainable growth in China," SciencePo Working papers Main hal-00972963, HAL.
    15. Oren Bar-Gill & Michal Barzuza & Lucian Bebchuk, 2006. "The Market for Corporate Law," Journal of Institutional and Theoretical Economics (JITE), Mohr Siebeck, Tübingen, vol. 162(1), pages 134-160, March.
    16. Lawrence White, 2002. "Globalized Securities Markets and Accounting: How Many Standards?," Working Papers 02-11, New York University, Leonard N. Stern School of Business, Department of Economics.
    17. Balbinder Singh Gill, 2024. "Natural disasters, public attention and changes in capital structure: international evidence," Annals of Finance, Springer, vol. 20(2), pages 199-238, June.
    18. repec:spo:wpmain:info:hdl:2441/6741 is not listed on IDEAS
    19. Maria N. Ivanova, 2017. "Profit growth in boom and bust: the Great Recession and the Great Depression in comparative perspective," Industrial and Corporate Change, Oxford University Press and the Associazione ICC, vol. 26(1), pages 1-20.
    20. Ricardo Molero Simarro, 2011. "Functional Distribution of Income and Economic Growth in the Chinese Economy, 1978-2007," Working Papers 168, Department of Economics, SOAS University of London, UK.
    21. Divakaruni, Anantha & Jones, Howard, 2021. "Disclosure, Firm Growth, and the JOBS Act," SocArXiv 3zumb, Center for Open Science.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:bpj:ajlecn:v:2:y:2011:i:1:n:5. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Peter Golla (email available below). General contact details of provider: https://www.degruyterbrill.com .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.