Value Creation and Value Destruction in the Societas Europaea: Evidence from the New Legal Form

Lamp, Felix

doi:10.2139/ssrn.1728162

“…Little is known about how exploiting the SE as a vehicle for legal arbitrage changes a firm's value. Two early studies by Eidenmüller et al (2009) and Lamp (2011) found no evidence that incorporating under European law overall affects a firm's value. This lack of findings in the previous literature on SE formations may be due to a lack of statistical power (MacKinlay, 1997), since both studies used rather small samples.…”

Section: Introductionmentioning

confidence: 97%

The Economic Impact of Forming a European Company

Hornuf

¹

,

Mohamed

²

,

Schwienbacher

³

2016

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Ever since 2004 companies located in Member States of the European Economic Area have been able to opt to incorporate in a supranational legal form, the Societas Europaea. We found that companies located in Member States where the Societas Europaea offers additional legal arbitrage opportunities benefit most. Moreover, our results show that the stock price reaction is positive when the decision to incorporate as an Societas Europaea involves moving the firm's registered office and that firms are moving to jurisdictions with significantly lower corporate tax rates. Finally, we found evidence of uncertainty at the registration date but not at the time of the shareholder meeting.

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“…Two early studies by Eidenmüller et al . () and Lamp () found no evidence that incorporating under European law overall affects a firm's value. This lack of findings in the previous literature on SE formations may be due to a lack of statistical power (MacKinlay, ), since both studies used rather small samples.…”

Section: Introductionmentioning

confidence: 99%

The Economic Impact of Forming a European Company

Hornuf

¹

,

Mohamed

²

,

Schwienbacher

³

2019

J of Common Market Studies

View full text Add to dashboard Cite

Ever since 2004 companies located in Member States of the European Economic Area have been able to opt to incorporate in a supranational legal form, the Societas Europaea. We found that companies located in Member States where the Societas Europaea offers additional legal arbitrage opportunities benefit most. Moreover, our results show that the stock price reaction is positive when the decision to incorporate as an Societas Europaea involves moving the firm's registered office and that firms are moving to jurisdictions with significantly lower corporate tax rates. Finally, we found evidence of uncertainty at the registration date but not at the time of the shareholder meeting.

show abstract