Between the mid-1980s and the early 2000s, the corporate-law literature moved from theory to data. A sequence of empirical studies asked, in increasing methodological sophistication, whether the state in which a firm incorporates actually moves firm value or governance behavior. The earliest of these studies — Peter Dodd and Richard Leftwich's 1980 paper in the Journal of Business6 — used the event-study methodology that had recently been developed in financial economics to ask whether the announcement of a reincorporation produced an abnormal stock-price reaction. Dodd and Leftwich found small and statistically modest effects, mostly positive, around proxy mailings. The methodology they introduced — measuring market reaction in a narrow window around the filing event — is the methodology this Tracker uses today.
Roberta Romano's 1985 piece, Law as a Product, in the Journal of Law, Economics, and Organization, set out the foundational state-competition framework, arguing that incorporation is best understood as a product market with Delaware as the dominant supplier.7 Jeffrey Netter and Annette Poulsen extended the empirical record in 1989,8 and Randall Heron and Wilbur Lewellen published the widely cited modern reincorporation event study in 1998, in the Journal of Financial and Quantitative Analysis.9 Heron and Lewellen distinguished between announcement-day and meeting-day windows and grouped firms by reincorporation motivation (takeover defense, director-liability limits, and other), and their methodology is cited throughout the modern event-study literature.
Robert Daines's 2001 Journal of Financial Economics paper is the high-water-mark empirical claim for a Delaware value premium.10 Daines used Tobin's Q — the ratio of a firm's market value to the replacement cost of its assets — as a measure of firm value, and reported a robust premium for Delaware-incorporated firms after controlling for industry, size, and growth opportunities. Guhan Subramanian's 2004 Journal of Law, Economics, and Organization reply documented that the premium had largely vanished by the early 2000s, opening the methodological critique that culminated in Bartlett-Partnoy (2020).11 Lucian Bebchuk and Alma Cohen, in their 2003 piece in the Journal of Law and Economics, examined firm-level decisions about where to incorporate and produced a complementary empirical record on the demand side of the state-competition question.12
By the mid-2000s, the empirical record on whether state corporate law moves firm value had settled into a position best described as ambiguous and time-varying. The Cary-Winter debate had not been resolved by the data; it had been complicated by it.