Does Charter Competition Foster Entrepreneurship? A Difference-in-Difference Approach to European Company Law Reforms

Braun, Reiner ; Eidenmüller, Horst ; Engert, Andreas ; Hornuf, Lars

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Document Type: Article
Year of publication: 2013
The title of a journal, publication series: Journal of Common Market Studies : JCMS
Volume: 51
Issue number: 3
Page range: 399-415
Place of publication: Oxford
Publishing house: Wiley-Blackwell
ISSN: 0021-9886 , 1468-5965
Publication language: English
Institution: School of Law and Economics > Bürgerl. Recht, Deutsches u. Europ. Wirtschaftsrecht u. Unternehmenssteuerrecht (Engert 2010-19)
Subject: 340 Law
Abstract: We study how company law reforms, particularly the reduction or abolition of minimum capital requirements, in various European jurisdictions affect the decision of entrepreneurs to incorporate by means of a private limited liability company (LLC). Since the landmark rulings of the European Court of Justice (ECJ) in the years 1999, 2002 and 2003, entrepreneurs in the European Union (EU) have been able to choose the country of incorporation independently of their real seat. As a result, the proliferation of the UK private company limited by shares has posed a competitive threat to many European legislators. We analyze whether the reforms adopted in Spain, France, Hungary, Germany and Poland have promoted the popularity of domestic legal forms and encouraged entrepreneurship more generally. Using a difference-in-difference approach, we record a strong impact in both respects, especially if the minimum capital requirement was reduced or abolished.

Dieser Eintrag ist Teil der Universitätsbibliographie.

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