Competition for Corporate Charters and the Lesson of Takeover Statutes

Abstract

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.