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Robert Rhee’s Article, The Irrelevance of Delaware Corporate Law, poses provocative questions about why Delaware dominates the market for corporate law given the apparent irrelevance of state incorporation choice for companies’ market valuations. He shows, first, that publicly traded companies incorporated in Delaware have similar valuations to companies incorporated in other states over time, and second, that market actors do not exhibit a preference to reincorporate existing firms in Delaware.

Rhee analyzes exclusively the realm of publicly traded corporations, which is understandable given that his analysis is necessarily limited to publicly available data. Publicly traded corporations are undeniably economically significant, yet they constitute only one method of carrying out economic activity that, arguably, is shrinking in importance over time. When one considers the space of non-publicly traded corporations, a different picture emerges. This response considers that space below and then offers some thoughts on how these competing pictures might be reconciled.

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