An Empirical Study of Default Rules and Menus in China, Hong Kong and Taiwan

Research output: Conference Papers (RGC: 31A, 31B, 32, 33)32_Refereed conference paper (no ISBN/ISSN)peer-review

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Detail(s)

Original languageEnglish
Publication statusAccepted/In press/Filed - 14 Jun 2017

Conference

TitleConference on Empirical Legal Studies in Asia
LocationAcademia Sinica
PlaceTaiwan
CityTaipei
Period14 - 15 June 2017

Abstract

Most theoretical and empirical studies of default rules and menus in corporate law focus on American law. To test whether corporate law-and-economic theory aptly explains corporate practice in other countries, this article analyzes 498 randomly sampled charters of corporations listed on the stock exchanges in China, Hong Kong, and Taiwan. The major findings are that firms often opted into menus and rarely opted out of default rules without menus, supporting the minimization of transaction cost theory. However, Chinese firms may keep default rules for non-economic reasons. Hansmann’s delegation theory explains the brief corporate charters we observed in Taiwan, but not those in China and Hong Kong. Corporations in China, Hong Kong, and Taiwan do not appear to be systematically more pro-minority or pro-controller than their jurisdictions’ corporate laws. This contradicts the principal–agent theory.

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Citation Format(s)

An Empirical Study of Default Rules and Menus in China, Hong Kong and Taiwan. / LIN, Yu-Hsin; Chang, Yun-chien.

2017. Paper presented at Conference on Empirical Legal Studies in Asia, Taipei, Taiwan.

Research output: Conference Papers (RGC: 31A, 31B, 32, 33)32_Refereed conference paper (no ISBN/ISSN)peer-review