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The Regulation of Corporate Acquisitions. A Law and Economics Analysis of European Proposals for Reform


  • Bergström, Clas

    () (Dept. of Finance, Stockholm School of Economics)

  • Högfeldt, Peter

    () (Dept. of Finance, Stockholm School of Economics)

  • Macey, Jonathan R
  • Samuelsson, Per


A well-functioning market for corporate control is considered by the EC Commission as an important method for monitoring incumbent management and for improving the allocation of resources within Europe. This article examines the regulation of corporate acquisitions in Europe as well as inherent restrictions on takeovers from a law and economics perspective. We find that the European proposals for reform in the proposed 13th Company Law directive do not live up to their promise of encouraging acquisitions. Indeed, we find that the proposed rules inhibit acquisitions in significant ways, and therefore are more likely to result in reduced monitoring of incumbent management and in inefficiencies in the allocation of productive resources in Europe.

Suggested Citation

  • Bergström, Clas & Högfeldt, Peter & Macey, Jonathan R & Samuelsson, Per, 1994. "The Regulation of Corporate Acquisitions. A Law and Economics Analysis of European Proposals for Reform," SSE/EFI Working Paper Series in Economics and Finance 33, Stockholm School of Economics.
  • Handle: RePEc:hhs:hastef:0033

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    References listed on IDEAS

    1. Robert Jarrow & Dilip Madan, 1995. "Option Pricing Using The Term Structure Of Interest Rates To Hedge Systematic Discontinuities In Asset Returns," Mathematical Finance, Wiley Blackwell, vol. 5(4), pages 311-336.
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    8. Harrison, J. Michael & Pliska, Stanley R., 1981. "Martingales and stochastic integrals in the theory of continuous trading," Stochastic Processes and their Applications, Elsevier, vol. 11(3), pages 215-260, August.
    9. Hull, John & White, Alan, 1990. "Pricing Interest-Rate-Derivative Securities," Review of Financial Studies, Society for Financial Studies, vol. 3(4), pages 573-592.
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    More about this item


    Takeover regulation; capital market monitoring; EU- regulation;

    JEL classification:

    • G32 - Financial Economics - - Corporate Finance and Governance - - - Financing Policy; Financial Risk and Risk Management; Capital and Ownership Structure; Value of Firms; Goodwill
    • G34 - Financial Economics - - Corporate Finance and Governance - - - Mergers; Acquisitions; Restructuring; Corporate Governance
    • G38 - Financial Economics - - Corporate Finance and Governance - - - Government Policy and Regulation


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