Articles in Refereed Journals
Innovation and Entrepreneurship Research

How Does the Market React to the Societas Europaea?

Eidenmüller, Horst; Engert, Andreas; Hornuf, Lars (2010). How Does the Market React to the Societas Europaea? European Business Organization Law Review, 11 (1), 35-50.

When Council Regulation (EC) No 2157/2001 on the Statute for a European Company (Societas Europaea - SE) became effective on 8 October 2004, it offered publicly traded companies, for the first time, a choice between competing company laws, namely the national law of the company’s home state and the law of the supranational SE. Using an event study methodology, we analyse a unique dataset of publicly traded firms that have announced to re-incorporate under the SE Regulation. We find the re-incorporation decision to have a positive impact on firms’ stock market value. The abnormal returns associated with re-incorporating as an SE increase over the years, which we interpret as the result of declining legal uncertainty and a rising reputational value of the SE corporate form.

Also published as ECGI Law Working Paper No. 127/2009 under the title "The Societas Europaea: Good News for European Firms"