Dhammika Dharmapala : Courses and Seminars
(BID, CORE)This course provides an overview of the application to law of the basic principles of corporate finance and financial economics. Topics include the concept of discounting and present value, portfolio theory and diversification, the theory of efficient capital markets and its applications in securities litigation, corporate capital structure and bond covenants, and the analysis of options and other derivative instruments.The principles and concepts of corporate finance are essential to understanding modern corporate transactions. Increasingly, lawyers must understand these principles in order to structure transactions in ways that achieve particular business objectives. The concepts in this class are also of great value to lawyers outside the corporate area: financial principles can be fruitfully applied to a wide variety of legal questions, ranging from estate planning to the calculation of tort awards.This class assumes no background in finance, and is aimed primarily at students with little or no prior exposure to the field (rather than those with an MBA or with an undergraduate finance major).It does not use any mathematics beyond basic arithmetic and some simple algebra.
Corporate Governance in Emerging Markets
(++, SRP, WP, BID, CORE, SEM) This seminar provides an overview of recent developments and scholarship relating to corporate governance, primarily from a “law and finance” perspective. It particularly emphasizes the context of developing and transitional economies and other jurisdictions without a long tradition of strong corporate and securities law and enforcement. Topics to be covered include: 1) The emerging markets context, the distinctive legal and governance issues raised by firms with controlling shareholders, and the legal and institutional preconditions for stock market development 2) Legal and economic aspects of tunneling and other forms of self-dealing among firms with controlling shareholders 3) The debate on the impact of historical legal origins on stock market development 4) The evidence on the impact of corporate and securities law reforms on firm value and stock market development, introduced through country-level studies of major recent reforms in Korea, India and Russia 5) The distinctive context of corporate governance in China, including issues raised by the role of governmental entities as controlling shareholders 6) Regulatory dualism, as exemplified by Brazil’s Novo Mercado, and the regulation of hostile takeovers in emerging markets 7) The causes and implications of the phenomenon of international cross-listing 8) The role of public and private enforcement of securities law in stock market developmentWhile some background in areas such as corporate and securities law would be helpful, there is no formal prerequisite for the seminar.Some readings from the law and finance literature will be interdisciplinary in approach, and some undertake statistical analysis. However, no background in finance or statistics will be assumed. Rather, the emphasis will be on understanding the implications of the readings for law and policy.
Introduction to Law and Economics
(BID, CORE)This class is an introduction to the economic analysis of law, an approach that has grown rapidly in the last thirty years and now exerts a profound influence on how law is taught and on how courts make decisions. The class will provide you with a set of tools for analyzing transactions and how they are shaped by legal rules, through systematic exposure to the economic way of thinking about law across a variety of legal contexts. These tools are intended to complement, not to challenge, the traditional doctrinal approach to law. The objective is to equip you to use economic reasoning in an informed and critical spirit to analyze cases and transactions of the sort you may encounter in practice. More generally, you should be able to understand and critically evaluate the use of economic analysis in legal scholarship, judicial opinions, and other legal contexts.