This paper defends, and further develops, our earlier work on the effects of regulatory competition on takeover law. We have argued that competition for corporate charters provides incentives to states to protect incumbent managers from hostile takeovers, and that the empirical evidence is consistent with this account. To improve the performance of regulatory competition, we have put forward the possibility of choice-enhancing federal intervention; such intervention would expand shareholder choice, and encourage
states to become more attentive to shareholder interests, without imposing any mandatory arrangements. Replying to Jonathan Macey’s response to our work, we show that none of his claims weakens our analysis.