The Law and Economics of Corporate Governance

The Law and Economics of Corporate Governance

Changing Perspectives

Edited by Alessio M. Pacces

In this timely book, the law and economics of corporate governance is approached from various angles. Alessio Pacces shows that perspectives are evolving and that they differ between the economic and the legal standpoint, as well as varying between countries. A group of leading scholars offers their views and provides fresh empirical evidence on existing theories as well as developing new theoretical insights based on empirical puzzles. They all analyse the economics of corporate governance with a view to how it should, or should not, be regulated.

Chapter 2: Incorporating under European Law: The Societas Europaea as a Vehicle for Legal Arbitrage

Horst Eidenmüller, Andreas Engert and Lars Hornuf

Subjects: economics and finance, law and economics, law - academic, corporate law and governance, law and economics


* Horst Eidenmüller, Andreas Engert and Lars Hornuf INTRODUCTION When Council Regulation (EC) No. 2157/2001 on the Statute for a European Company (Societas Europaea – SE) became effective on 8 October 2004, the first supranational type of company entered the European stage. After one year, only 16 firms had ventured into the new territory. The European Company seemed to be the stillborn that many commentators had predicted. In the following years, however, the SE refuted the critics. With annual growth rates of around 100 per cent, the number of European Companies had eventually increased beyond 200 by April 2008.1 If SE incorporations continue at the same pace, more than a thousand firms will have chosen this European corporate form by the year 2010. The SE’s growing success raises the question of what is driving SE incorporations. In this chapter, we argue that legal arbitrage – exploiting differences between the legal rules of different jurisdictions – is the primary motive for managers and shareholders to opt for the SE. Although the SE Regulation fails to provide a fully-fledged company law regime and refers * Reprinted with kind permission of European Business Organization Law Review, 10 (March 2009): 1–33. © 2009 by TMC Asser Press. All rights reserved. We would like to thank the 26 interview participants without whom this project would not have been possible. Furthermore, we are indebted to John Armour, Matthias Dischinger, Andreas Haufler, Tobias Tröger, Joachim Winter, Klaus Wohlrabe and participants in the Public Economics Seminar at the University of Munich,...

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