821 research outputs found

    Comment on ‚ÄúPresidents and the Politics of Structure‚ÄĚ

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    Terry Moe and Scott Wilson\u27s (1994) theory elaborating on the president\u27s countervailing institutional motivation to strengthen and consolidate the bureaucracy under presidential control is examined. The omission of political parties and courts from the analysis could have altered some of their conclusions on comparative institutional advantages

    The States as a Laboratory: Legal Innovation and State Competition for Corporate Charters

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    Corporate law is an arena in which the metaphor of the states as a laboratory describes actual practice, and, for the most part, this is a laboratory that has worked reasonably well. The goal of this Article is to map out over time the diffusion of corporate law reforms across the states. The lawmaking pattern we observe indicates a dynamic process in which legal innovations originate from several sources, creating a period of legal experimentation that tends to identify a statutory formulation that is thereafter adopted by the vast majority of states. Delaware and the Model Act quite often work in tandem. But there are occasions when they advance differing legal rules, accounting for some of the diversity in corporation codes that we observe

    Less is More: Making Institutional Investor Activism a Valuable Mechanism of Corporate Governance

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    Institutional investors have increasingly engaged in corporate governance activities, introducing proxy proposals and negotiating with management, with a goal of improving corporate performance. As shareholder activism has increased, financial economists have sought to measure its effect on performance. This Article reviews the corporate finance literature on institutional investors\u27 activities in corporate governance and uses the findings of the empirical literature to inform normative recommendations for the proxy process. In brief there is an apparent paradox: notwithstanding the development of shareholder activism and commentators\u27 generally positive assessments of it, the empirical research indicates that such activism has little or no effect on targeted firms\u27performance. This implies that activist institutions ought to reassess their agendas, in order to use their resources more effectively. The Article takes a two-pronged approach to furthering this aim. First, it suggests a mechanism of internal control, whereby funds would engage in periodic review of their shareholder-activism programs to identify the most fruitful governance objectives. Second, it seeks ways to provide incentives to undertake such internal reevaluations, advocating elimination or significant reduction of the subsidy of proposal sponsorship under the SEC rules unless a proposal achieves substantial voting support orpermittingfirms\u27 shareholders to choose what level of subsidy they wish to provide to proposal sponsors. The estimated savings from eliminating the subsidy for proposals that fail to receive at least 40% of the votes ranges from 293millionto293 million to 1.9 billio

    State Competition for Close Corporation Charters: A Commentary

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    A Cautionary Note on Drawing Lessons from Comparative Corporate Law

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    State Competition for Close Corporation Charters: A Commentary

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    Ian Ayres\u27 article, Judging Close Corporations in the Age of Statutes, raises some interesting questions concerning the relation between courts and legislatures in the production of corporation codes and the degree to which our general understanding of state competition for corporate charters is applicable to close corporations. These issues have not been considered by scholars participating in the debate over the efficacy of state corporation laws. Ayres\u27 article suggests that there is no reason to expect an overlap of concern, because one of his central points is that the processes by which public corporations and close corporations come to be regulated are quite distinct. I have a few quibbles with some of the characterizations in the article, and while they serve as the focus of my Comment, they really are only quibbles

    Segregating Schools: The Foreseeable Consequences of Tuition Tax Credits

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    Declining private school enrollments and the perceived failure of public schools to educate children effectively have spurred interest in restructuring American education to permit greater freedom of choice. The Ninety-fifth Congress extensively debated one proposal generated by this expanding discourse on educational alternatives: federal income tax credits for tuition payments to nonpublic elementary and secondary schools. Congressional debate focused on the constitutionality of the tuition tax credit under the establishment clause of the First Amendment. The legislation\u27s effect on the racial composition of the nation\u27s public school systems was considered only as a secondary policy argument with which to challenge the bill. This Note argues, however, that the segregative effect of the proposed tuition tax credit creates serious constitutional objections under the due process clause of the Fifth Amendment

    A Guide to Takeovers: Theory, Evidence and Regulation

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    The last decade witnessed an explosion of activity in the field of corporate takeovers, which ended in an environment of increased regulation of these transactions. These events have prompted extensive study into the causes for takeovers and the effects of their regulation. This article surveys and analyzes both the economic literature and the law in an attempt to determine which regulatory regimes make the most sense in light of the empirical evidence. Though no single theory is sufficient to explain all takeovers, the empirical evidence is most consistent with explanations of takeovers as value-maximizing events for target firm shareholders that enhance social efficiency. Economic learning and public policy, however, have not marched in step. Influenced by unsubstantiated fears and suspicions, often raised by managers, about the impact of takeovers on third parties, regulation in the United States has tended to thwart and burden takeovers as if they were non-value-maximizing wealth transfers. The author concludes that an informed reading of the literature suggests that much of the existing regulatory apparatus is unwarranted

    Politics of the Brady Report: A Comment

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    Competition for Corporate Charters and the Lesson of Takeover Statutes

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    In this Essay, Professor Romano considers the efficacy of competition among states for tax revenues generated by corporate charters. To this end, she focuses on how state takeover regulation--regulation which tends to benefit management rather than shareholders-affects this competition. She argues that federalism provides a safety net which protects investor interests and reduces the likelihood of self-serving management decision. Professor Romano concludes that the current state-based system of incorporation is preferable to a national regime
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