ABSTRACT
The economic analysis of corporate law dates back to the collaboration between a law professor and an economist: Berle and Means. 1 They identified the separation of ownership and control, with public corporations owned by a dispersed group of shareholders, none of whom owned enough shares to have the incentive to rigorously monitor managerial behaviour. 2 From agency problems, Ronald Coase 3 developed the theory of a firm, which explains the transactions within firms and between firms. Subsequently, Oliver Williamson filled in the gaps left by Coase, 4 by focusing on asset specificity. Jensen and Meckling’s 5 contribution must be acknowledged, as they coined the idea of firm as a nexus of contracts.
