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In this thorough and enlightening book, the authors examine the role of law in developing the large financial markets necessary for national economic success. They discuss the basic foundational law of contracts, property and tort, corporate law, and securities law, providing both a broad theoretical and empirical case for its value in financial markets.
The book begins with an historical analysis of the law’s development, reviewing the legal governance of corporate finance with an emphasis on the development of US securities law in the twentieth century. Also provided is an extensive empirical analysis of the law’s effect. A unique benefit of the book is its integration of all the relevant aspects, rather than examining them in isolation. Chapters cover the role of law in corporate finance, behavioral and empirical analyses, as well as current controversies in law and corporate finance. Ultimately, the book is a defense of the economic value of the law in the United States and throughout the world.
Students and scholars of business and law will find much of interest in the authors’ comprehensive study of the rule of law in today’s financial markets.
- Contents:
- 1. The Role of Law in Corporate Finance;
2. The Economics of the Law and Corporate Finance;
3. Behavioral Analysis of Law and Corporate Finance;
4. History of Law and Corporate Finance;
5. Empirical Analysis of the Law and Corporate Finance;
6. Current Controversies in Law and Corporate Finance.
Frank B. Cross, Herbert D. Kelleher Centennial Professor of Business Law, McCombs School of Business, Professor of Law, University of Texas Law School and Professor of Government, University of Texas, Austin and Robert A. Prentice, Ed and Molly Smith Centennial Professor of Business Law, McCombs School of Business, University of Texas, Austin, US
'Frank Cross and Robert Prentice have written a quite useful and very clear analysis and review of the interplay between law and corporate finance.’
– Mark Roe, Harvard University Law School, US
‘In this impressive and ambitious book, the authors explore the role of the law in advancing the economic wellbeing of a society. Three tiers of legal regulation of business enterprises and of equity markets are examined: basic foundational law of contracts, property and tort; corporate law; and securities law. The classical economic case for government intervention on the grounds that it can enhance trust, reduce transaction costs and contribute to valuable network externalities is clearly and cogently outlined. There is also a thoughtful account of behavioural analysis of law and corporate finance. New empirical evidence is presented alongside a useful review of studies conducted by other scholars. Complementing the economic, behavioural and empirical analyses, the book also provides a concise history of the development of the law governing corporate finance. Having examined corporate finance law from these different standpoints, in the final chapter the authors draw upon their deep understanding of the subject to provide a new perspective on current controversies. A great virtue of this book is that it covers a great deal of material in a concise, lucid and stimulating manner. The fresh and rigorous analysis also stands out. There is much here that will be of value to students and scholars.’
– Eilis Ferran, University of Cambridge, UK
