ACLE Seminar: Guillaume Vuillemey (HEC Paris)

Guillaume Vuillemey, Associate Professor of Finance at HEC Paris, will talk about his paper ‘The origins of limited liability: Catering to safety demand with investors’ irresponsibility’.

Abstract

Limited liability is a key feature of corporate law. Using data on asset prices and capital flows in mid-19th century England, I argue that its liberalization was not decided to relax firms' financing constraints, but to satisfy investors' demand for "safe" stores of value. Limited liability eliminated adverse selection about the quality of other shareholders; stocks could be held to store wealth in diversified portfolios, without extended forms of responsibility. Prices of newly issued stocks are consistent with this hypothesis. Thus, the quest for "safe" stores of value explains not only features of debt markets, but also of equity markets.

Paper

The paper can be found here.

Registration: https://acle-seminar-with-prof-guillaumevuillemey.eventbrite.nl/
Additional information: https://www.uva.nl/shared-content/subsites/amsterdam-center-for-law--economics/en/events/2023/9/acle-seminar-guillaume-vuillemey-hec-paris.html?origin=7XoSzB0JSoqJd5FDJBTfwQ