Faculty of Business Administration

Visiting Scholar Seminar

State Competition for Corporate Charters and Firm Value: A Theoretical Analysis


Prof. Tat-kei LAI

Associate Professor of Economics and Quantitative Methods,

IESEG School of Management,




Federalism in the U.S. allows competition among states in the provision corporate laws. This system helps strengthen firms’ corporate governance. This paper studies how state competition of corporate charters can affect firm value. In our model, firms can be set up by entrepreneurs who have ideas that can generate high enough value. Firms set up in one state may reincorporate in another state with a different set of corporate laws, subject to a reincorporation cost. We show that, when the reincorporation cost is sufficiently high, both states would offer a set of “bad” corporate laws in equilibrium.


Date:          16 Dec 2019 (Mon)

Time:          15:00 – 16:00

Venue:        E22-2007


A Short Biography

Prof. Tat-kei LAI is currently Associate Professor of Economics and Quantitative Methods at IESEG School of Management, France, and member of Lille Économie Management of Centre national de la recherche scientifique (LEM-CNRS 9221), France. His research interests include empirical microeconomics and corporate finance.