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Full-Text Articles in Law
Braiding: The Interaction Of Formal And Informal Contracting In Theory, Practice And Doctrine, Ronald J. Gilson, Charles F. Sabel, Robert E. Scott
Braiding: The Interaction Of Formal And Informal Contracting In Theory, Practice And Doctrine, Ronald J. Gilson, Charles F. Sabel, Robert E. Scott
Ronald J. Gilson
This article studies the relationship between formal contract enforcement, where performance is encouraged by the prospect of judicial intervention, and informal enforcement, where performance is motivated by the threat of lost reputation and expected future dealings or a taste for reciprocity. The incomplete contracting literature treats the two strategies as separate phenomena. By contrast, a rich experimental literature considers whether the introduction of formal contracting and state enforcement “crowds out” or degrades the operation of informal contracting. Both literatures, however, focus too narrowly on formal contracts as a system of incentives for inducing parties to perform substantive actions, while assuming …
Braiding: The Interaction Of Formal And Informal Contracting In Theory, Practice And Doctrine, Ronald J. Gilson, Charles F. Sabel, Robert E. Scott
Braiding: The Interaction Of Formal And Informal Contracting In Theory, Practice And Doctrine, Ronald J. Gilson, Charles F. Sabel, Robert E. Scott
Ronald J. Gilson
This article studies the relationship between formal contract enforcement, where performance is encouraged by the prospect of judicial intervention, and informal enforcement, where performance is motivated by the threat of lost reputation and expected future dealings or a taste for reciprocity. The incomplete contracting literature treats the two strategies as separate phenomena. By contrast, a rich experimental literature considers whether the introduction of formal contracting and state enforcement “crowds out” or degrades the operation of informal contracting. Both literatures, however, focus too narrowly on formal contracts as a system of incentives for inducing parties to perform substantive actions, while assuming …
Locating Innovation: The Endogeniety Of Technology, Organizational Structure And Financial Contracting, Ronald J. Gilson
Locating Innovation: The Endogeniety Of Technology, Organizational Structure And Financial Contracting, Ronald J. Gilson
Ronald J. Gilson
There is much we do not understand about the “location” of innovation; the confluence, for a particular innovation, of the technology associated with the innovation, the innovating firm’s size and organizational structure, and the financial contracting that supports the innovation. This article develops the theme that these three determinants of the location of innovation are simultaneously determined through examination of examples of innovative activity whose location is characterized by tradeoffs between pursuing the activity in a an established company or in a smaller, earlier stage company, or some combination of the two. It first considers the dilemma faced by an …
Controlling Family Shareholders In Developing Countries: Anchoring Relational Exchange, Ronald J. Gilson
Controlling Family Shareholders In Developing Countries: Anchoring Relational Exchange, Ronald J. Gilson
Ronald J. Gilson
The Law and Finance account of the ubiquity of controlling shareholders in developing markets is based on conditions in the capital market: poor shareholder protection law prevents controlling shareholders from parting with control out of fear of exploitation by a new controlling shareholder who acquires a controlling position in the market. This explanation, however, does not address why we observe any minority shareholders in such markets, or why controlling shareholders in developing markets are most often family-based. This paper looks at the impact of “bad law” on shareholder distribution in a very different way. Developing countries typically provide not only …