Bebchuk "Federalism and the Corporation: The Desirable Limits
on State Competition in Corporate Law," 105 Harvard Law Review
Reprinted in Company Law, (New York University Press, 1993), edited
by Sally Wheeler, University of Nottingham, England, 241-314.
Reprinted (translated into Japanese) in Ryvdai Law Review, No. 50,
law scholars have long debated whether state competition for corporate
charters is a "race for the bottom" or a "race for the top." In
this Article, Professor Bebchuk offers an analysis of the dynamics
and performance of state charter competition. He shows how the presence
of managerial opportunism and externalities may lead states to adopt
undesirable corporate law rules. Professor Bebchuk identifies the
various issues with respect to which state competition is likely
to fail, and he advocates an expansion of federal regulation to
govern all of these issues. He also connects the state competition
question with the question of contractual freedom in corporate law
and argues that many scholars should reconsider their inconsistent
views regarding these two questions. Finally, Professor Bebchuk
concludes by addressing potential objections to the expansion of
federal corporate regulation.
updated: Dec. 2002
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