More and more companies appear with strange abbreviations behind their business name. Consider Chrysler Group LLC (instead of Inc.) or LVMH Montres and Joaillerie France SAS. Some even speak about the 'endangered corporate form' and point to the rise of the uncorporation.
This Primer examines how the uncorporation has evolved in the United States and, more recently, in other economies around the world. We find that the growth in non-listed business forms in Europe, Latin America and Asia have been shaped by a mixture of learning and professional advice arising from the company law review process, as well as the indirect influence of overseas business forms. We examine the main components of uncorporate business forms that are responsible for limiting transaction costs, curbing opportunism and creating organizational structures that are compatible with entrepreneurial expectations. We show the main differences between the partnership-type and corporate-type uncorporations, particularly the LLC in the United States (US-LLC), the SAS in France and Colombia, the LLP in United Kingdom (UK-LLP), Singapore (S-LLP), India (I-LLP) and Japan (Yugen Sekinin Jigyou Kumiai, J-LLP). We find that, given the pitfalls in the evolution of uncorporation laws, an international Model Act would be consistent with lower transaction and information costs and could help to encourage cooperation between firms situated in different jurisdictions.
Conglomerates, multinational corporations and business groups are non-exclusive forms of complex firms. Often organized as corporate networks, complex firms control a myriad of entities connected through ownership links. We investigate whether...Read more
In a 2010 special report, The Economist called the resurgence of state-owned mega-enterprises, especially those in emerging economies, “Leviathan Inc,” and criticized their poor governance and low efficiency. We show that state-owned enterprises...Read more
We study if a CEO’s equity-based compensation affects the expected value generation in takeovers. When the objectives of management and shareholders are more aligned, as proxied by the use of equity-based compensation, more value-maximizing...Read more
We show theoretically and empirically that executives are paid less for their own firm's performance and more for their rivals' performance if an industry's firms are more commonly owned by the same set of investors. Higher common ownership also...Read more