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Access_open An Eclectic Approach to Loyalty-Promoting Instruments in Corporate Law: Revisiting Hirschman's Model of Exit, Voice, and Loyalty

Journal Erasmus Law Review, Issue 2 2013
Keywords Eclecticism, corporate law & economics, corporate constitutionalism, loyalty-promoting instruments
Authors Bart Bootsma MSc LLM
AbstractAuthor's information

    This essay analyses the shareholder role in corporate governance in terms of Albert Hirschman's Exit, Voice, and Loyalty. The term 'exit' is embedded in a law & economics framework, while 'voice' relates to a corporate constitutional framework. The essay takes an eclectic approach and argues that, in order to understand the shareholder role in its full breadth and depth, the corporate law & economics framework can 'share the analytical stage' with a corporate constitutional framework. It is argued that Hirschman's concept of 'loyalty' is the connecting link between the corporate law & economics and corporate constitutional framework. Corporate law is perceived as a Janus head, as it is influenced by corporate law & economics as well as by corporate constitutional considerations. In the discussion on the shareholder role in public corporations, it is debated whether corporate law should facilitate loyalty-promoting instruments, such as loyalty dividend and loyalty warrants. In this essay, these instruments are analysed based on the eclectic approach. It is argued that loyalty dividend and warrants are law & economics instruments (i.e. financial incentives) based on corporate constitutional motives (i.e. promoting loyalty in order to change the exit/voice mix in favour of voice).


Bart Bootsma MSc LLM
PhD candidate in the corporate law department at Erasmus School of Law, Erasmus University Rotterdam. Email: bootsma@law.eur.nl. The research for this article has been supported by a grant from the Netherlands Organisation for Scientific Research (NWO) in the Open Competition in the Social Sciences 2010. The author is grateful to Ellen Hey, Klaus Heine, Michael Faure, Matthijs de Jongh and two anonymous reviewers for their constructive comments and suggestions. The usual disclaimer applies.

Alessandra Arcuri
Associate Professor of International Economic Law and Law and Economics, Erasmus School of Law, Erasmus University Rotterdam. I am grateful to the Editorial Board of the Erasmus Law Review, and in particular to Andria Naudé-Fourie for her precious support. Thanks also to Professor Yuwen Li, to all the referees who provided valuable feedback regarding the contributions in this issue, and to the participants in the Symposium on ‘Food Regulatory Regimes and the Challenges Ahead’, held during the Society for Risk Analysis — Europe Conference, King's College London, 21–23 June 2010, where some of the articles published in this issue were originally presented.

Alessandra Arcuri
Dr. Alessandra Arcuri is Assistant Professor, Rotterdam Institute of Law and Economics (RILE), Department of International Law, School of Law, Erasmus University Rotterdam. Email: acuri@frg.eur.nl. The author wishes to thank an anonymous referee, Giuseppe Dari-Mattiacci and the editorial board of the Erasmus Law Review for thoughtful comments; the usual disclaimer applies.
Article

Access_open Introduction

Multi- and interdisciplinarity: mere theory or just practice?

Journal Erasmus Law Review, Issue 3 2008
Authors Jeanne Gaakeer

Jeanne Gaakeer

Roberto Pardolesi
Roberto Pardolesi is Professor of Comparative Law and Private Law at the Guido Carli University of Rome.

Bruno Tassone
Bruno Tassone is Attorney in Rome, Professor of Civil Law Torts at the Guido Carli University of Rome and Professor of Copyright Law at the University of Terano.
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