Abstract and Keywords
Corporations operate in numerous markets, for example product markets, labor markets, and capital markets. This chapter focuses on the market that is the prerequisite for firms’ successful operation in all other markets, as it is the market that frames their organizational structure and governance: the market for corporate law. The first part analyzes the dynamics of the US market for corporate law, which can best be characterized as states competing for corporate charters, along with data pertinent to the question of whom this market organization benefits—managers or shareholders and explanations why Delaware has had a persistent and commanding position. The second part explains Delaware’s persistence as the preeminent incorporation state. This is a distinctive feature of US corporate law. While there are other federal systems of corporate law, a similar “Delaware” phenomenon does not exist. The chapter concludes with a summary and suggestions for future research.
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