Race to the top or bottom? Corporate governance, freedom of reincorporation and competition in law

Fluck, Zsuzsanna; Mayer, Colin

doi:10.1007/s10436-005-0022-y

Cited by 8 publications

(2 citation statements)

References 19 publications

(31 reference statements)

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“…Bhagat and Brickley, 1984;Malatesta and Walking, 1988;Agrawal and Mandelker, 1990). For this particular reason, the UK City Code on Takeovers discourages any type of defensive tactics and instead promotes takeover bids (Bebchuk and Cohen, 2003;Fluck and Mayer, 2005). For example, the Code does not permit firms to introduce poison pills once they have become subject to a takeover bid.…”

Section: Inter-jurisdictional Competition In the Usmentioning

confidence: 94%

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Contractual corporate governance

Goergen

Renneboog

2008

Journal of Corporate Finance

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Companies have the choice to deviate from their national corporate governance standards by opting into another system. They can do so via contractual devices -such as cross-border mergers and acquisitions, (re)incorporations, and cross-listings -which enable them to choose their preferred level of investor protection and regulation. This paper reviews these three main contractual governance devices, their effect on value, and whether their adoption by firms induces a race to the bottom or a race to the top. Indeed, firms may opt for less shareholderorientation or investor protection (shareholder-expropriation hypothesis) rather than for more stringent rules that require firms to focus on shareholder value (bonding hypothesis).

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Section: Inter-jurisdictional Competition In the Usmentioning

confidence: 94%

“…Winter, 1977;Romano, 1985). Corporations will end up establishing their legal seat in a jurisdiction where the legal services are provided at the lowest cost and priced most properly in relation to their needs (Fluck and Mayer, 2005). This is often called the costavoidance hypothesis.…”

Section: (Re)incorporationsmentioning

confidence: 99%