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RULING SELF-DEALING IN A GLOBAL MARKET: A REASSESSMENT OF THE CONVERGENCE VS. PATH-DEPENDENCY DEBATE
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Michele Pizzo 
, Nicola Moscariello , Rosa Vinciguerra
Abstract
Self-dealing refers to all kinds of transactions and operations whose aim is to divert value from a company to corporate controllers. In order to tackle self-dealing, scholars and regulators have emphasised the importance of legal tools. However, although the pro-regulatory approach prevails on a wide scale in the academic arena, there still exists a marked divergence between theoretical positions supporting the existence of a benchmark model towards which to converge (convergence hypothesis) and those that underscore the importance of socio-economic factors on the efficacy of governance rules (path dependency view). The aim of this paper is to join in the convergence vs. path dependency debate by adding some considerations on the efficiency of mandatory rules to the well-known investigations on the effectiveness of legal frameworks. Specifically, considering the current market integration and associated opportunities and threats, the traditional cost-benefit analysis has been extended in order to embrace direct and indirect costs specifically associated to the issue of domestic rules in a global scenario. Such an economic analysis on self-dealing introduces new variables that may support the convergence view and encourage at least a partial and gradual adjustment of national legislations towards the Anglo-Saxon model. To test our hypothesis, an examination of the self-dealing rules adopted in Germany, Italy and UK has been conducted. In particular, spatial and temporal comparisons of conflict of interests and self-dealing legislations have been carried out in order to appreciate trends, differences and similarities of some of the most important European legal frameworks.
Keywords: Legal Framework, Europe, Corporate Governance
How to cite this paper: Pizzo, M., Moscariello, N., Vinciguerra, R. (2010). Ruling self-dealing in a global market: a reassessment of the convergence vs. path-dependency debate. Corporate Ownership & Control, 7(4-3), 380-392. https://doi.org/10.22495/cocv7i4c3p3
