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Why do businesses incorporate in other EU Member States? An empirical analysis of the role of conflict of laws rules

Gerner-Beuerle, Carsten and Mucciarelli, Frederico M. and Schuster, Edmund-Philipp and Siems, Mathias (2018) Why do businesses incorporate in other EU Member States? An empirical analysis of the role of conflict of laws rules. International Review of Law and Economics, 56. pp. 14-27. ISSN 0144-8188

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Identification Number: 10.1016/j.irle.2018.05.002

Abstract

Research in law, political science and economics has taken a strong interest in the way companies strategically incorporate in foreign jurisdictions. However, the empirical research about corporate mobility in the EU has so far been limited in two respects: it has focused on the analysis of foreign companies in the UK and it has mainly been concerned with differences in the costs of incorporation such as minimum capital requirements. This paper aims to fill these gaps. It is the first paper that presents data on incorporations of foreign businesses in the commercial registers of each EU Member State. It is also the first one to assess the impact of differences in the conflict of laws rules applicable to companies as they reflect the case law of the Court of Justice on the freedom of establishment. It finds that countries which have a clear-cut version of the ‘incorporation theory’ attract more incorporations than countries which have retained elements of the ‘real seat theory’. The paper also discusses the policy implications from these findings for EU harmonisation in this field.

Item Type: Article
Official URL: https://www.sciencedirect.com/journal/internationa...
Additional Information: © 2018 Elsevier Inc.
Divisions: Law
Subjects: K Law > K Law (General)
JEL classification: G - Financial Economics > G3 - Corporate Finance and Governance > G38 - Government Policy and Regulation
K - Law and Economics > K2 - Regulation and Business Law > K22 - Corporation and Securities Law
K - Law and Economics > K3 - Other Substantive Areas of Law > K34 - Tax Law
L - Industrial Organization > L2 - Firm Objectives, Organization, and Behavior > L29 - Other
M - Business Administration and Business Economics; Marketing; Accounting > M1 - Business Administration > M13 - Entrepreneurship
Sets: Departments > Law
Date Deposited: 31 May 2018 10:16
Last Modified: 21 Jun 2018 11:17
Funders: EU Commission (DG Justice)
URI: http://eprints.lse.ac.uk/id/eprint/88136

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