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Contribution to Collected Edition

The End of Regulatory Competition in European Company Law?


Hornuf,  Lars
MPI for Innovation and Competition, Max Planck Society;

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Hornuf, L., & Lindner, J. (2016). The End of Regulatory Competition in European Company Law? In M. Eckardt, & C. Schubel (Eds.), Wettbewerb der Gesellschaftsrechtsordnungen in Ostmitteleuropa? (pp. 117-138). Baden-Baden: Nomos.

Cite as: http://hdl.handle.net/11858/00-001M-0000-002A-E924-7
In this article, we analyze regulatory competition in company law in the European Union (EU). By examining the empirical evidence, we conclude that regulatory competition, which is triggered by legal arbitrage and the competitive pressure exerted by national lawmakers, has run out of steam in the EU. Unlike in the United States, both language barriers and double accounting obligations for branches have hampered entrepreneurs from engaging in legal arbitrage. As a result, a necessary precondition for horizontal regulatory competition is absent. Furthermore, vertical regulatory competition is not on the agenda of national legislators, as the Statute for a European Company is largely based on national company laws. Revising the national company law therefore improves the supranational competitor as well and destroys the incentives for national legislators to engage in vertical regulatory competition.