Economic Analysis of Corporate Law

Prepared for Encyclopedia of Law and Economics (Alain Marciano and Giovanni B. Ramello, Eds, Springer), 2020

20 Pages Posted: 30 Apr 2020

See all articles by David Gindis

David Gindis

University of Warwick - Warwick Law School

Martin Petrin

University of Western Ontario

Date Written: April 10, 2020

Abstract

The economic analysis of corporate law applies the concepts and tools of microeconomics to the study of the legal rules, regulations and practices that govern the formation and operation of business corporations, most notably as regards the rights and duties of directors, officers, shareholders, and creditors. The literature has focused mostly on publicly-traded corporations, but the analytical framework extends to the simpler cases of close corporations and limited liability companies and the more complex case of corporate groups. This article outlines the foundations of the economic analysis of corporate law, contrasts the classic approach with more recent functional scholarship, and briefly discusses the law and economics of three specific issues: limited liability, managerial liability, and takeovers.

Keywords: Economics of corporate law, theory of the firm, functional approaches, comparative institutional analysis, limited liability, managerial liability, takeovers

JEL Classification: D21, G34, K22, L21

Suggested Citation

Gindis, David and Petrin, Martin, Economic Analysis of Corporate Law (April 10, 2020). Prepared for Encyclopedia of Law and Economics (Alain Marciano and Giovanni B. Ramello, Eds, Springer), 2020, Available at SSRN: https://ssrn.com/abstract=3576513 or http://dx.doi.org/10.2139/ssrn.3576513

David Gindis (Contact Author)

University of Warwick - Warwick Law School ( email )

Gibbet Hill Rd.
Coventry, West Midlands CV4 8UW
United Kingdom

Martin Petrin

University of Western Ontario ( email )

1151 Richmond Street
London, ON, N6A 3K7
Canada

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