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85 Va. L. Rev. 247 (1999)
Team Production Theory of Corporate Law, A

handle is hein.journals/valr85 and id is 257 raw text is: VIRGINIA LAW REVIEW VOLUME 85 MARCH 1999 NUMBER2 ARTICLE A TEAM PRODUCTION THEORY OF CORPORATE LAW Margaret M. Blair* and Lynn A. Stout* INTRODUCTION ................................................................................... 248 I. ECONOMIC THEORIES OF THE CORPORATION ............................. 257 A. Conventional Economic Analyses of the Firm ....................... 258 B. Team Production Analysis of the Firm .................................... 265 C. The Public Corporation as a Mediating Hierarchy ................ 276 II. A TEAM PRODUCTION ANALYSIS OF THE LAW OF CORPORATIONS .............................................................................. 287 A. Directors' Legal Role: Trustees More than Agents ................ 290 *Senior Fellow, the Brookings Institution and Visiting Professor of Law, Georgetown University Law Center. Professor of Law, Georgetown University Law Center. Research on this Article has been funded in part by the Alfred P. Sloan Founda- tion and the Brookings Institution's Project on Corporations and Human Capital; we thank both for their support. Earlier versions of the Article were presented at con- ferences and workshops at the Annual Meeting of the American Law and Economics Association, the Brookings Institution, Columbia University School of Law, George- town University Law Center, the Eastern Economic Association, Northwestern Uni- versity School of Law, and the Russel Sage Foundation. We thank the participants at those events for their comments, and are especially indebted to Masahiko Aoki, David Charny, Jeffrey Gordon, Claire Hill, Larry Mitchell, and Luigi Zingales for their remarks. Stephen Bainbridge, John Coates, Lynne Dallas, Robert Frank, Robert Gibbons, David Haddock, Robert Hamilton, Henry Hansmann, Michael Klausner, Reinier Kraakman, Donald Langevoort, Gary Miller, Geoffrey Miller, Eric Orts, Roy Schotland, Steven Thel, and Randall Thomas have also provided im- portant feedback on earlier drafts. We are also grateful to Rohit Bhoothalinham, Matthew Gilroy, Gabriel Loeb, and Hannah Zwiebel for their research assistance. The opinions expressed in this Article are our own and should not be attributed to Brookings, its officers, directors or financial supporters, nor to the Georgetown University Law Center. 247

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