How Does Delaware Do It? Judges Alone Don’t Explain Chancery’s Speed

On July 19, 2022, in the Twitter v. Musk litigation, Chancellor Kathaleen McCormick presided over what was likely the most widely observed hearing on a motion to expedite in the Delaware Court of Chancery’s history. While deal bust-ups are front page fare for the financial press, the high profile of this case brought the Court of Chancery further into the national consciousness than usual (though who among us hasn’t asked “what is a chancery?”). On the day of the hearing, the public access telephone line was, indeed, “lit,” hitting its maximum capacity with merger arbs (and other interested Read more

Is Social Capital Associated with Corporate Innovation?

Both formal and informal institutions affect economic behavior in important ways, as economist Douglass C. North explained in his 1993 Nobel Prize lecture. Formal institutions include laws and regulations, and informal institutions include culture and norms. In a recent study, we explore the effect of social capital, an informal institution, on corporate innovation.

Social capital consists essentially of the shared values and social networks that create trust, enhance cooperation, and facilitate transactions within a given community. In a newly accepted paper at Journal of Corporate Finance, we provide evidence that social capital can also facilitate contracting for innovation within a … Read more