Ofer Eldar

Professor of Law, UC Berkeley School of Law

Professor (by courtesy), Finance Group, UC Berkeley Haas School of Business

I study corporate governance, entrepreneurial finance, and social enterprise and nonprofit ownership. My research combines institutional analysis and econometric methods to examine how legal structures and incentives shape economic growth and social value.

I am also a Senior Research Professor at the Halle Institute for Economic Research (IWH) and a Research Member of the European Corporate Governance Institute. I hold a Ph.D. in Financial Economics from Yale University.

Figure 1: A Taxonomy of Organizations. Giving by for-profits: Corporate Charity. Transacting by for-profits: For-profit Social Enterprises. Giving by nonprofits: Donative Organizations. Transacting by nonprofits: Nonprofit Social Enterprises.

The Organization of Social Enterprise: Transacting versus Giving

Develops a model of how information about beneficiaries’ abilities and needs shapes the choice between giving and transacting, and between nonprofit and for-profit forms
Transactions allow assistance to be tailored to individual needs, while giving reaches more beneficiaries but can be poorly matched to their needs
When beneficiaries differ sufficiently, transactions align profit with mission, allowing for-profit social enterprises to achieve maximal targeting quality at a limited scale
Certification of beneficiary transactions can help social enterprises scale without sacrificing targeting quality

The Rise of Anti-Activist Poison Pills, Forthcoming, Journal of Financial Economics (with T. Kirmse & M. Wittry)

Poison pills have been increasingly used to curb stock acquisitions by hedge fund activists, even though the rationale for adopting them is the threat of "creeping control" or protecting tax assets
Pills have evolved to include lower trigger ownership thresholds, more provisions that aggregate the holdings of owners acting in concert, and provisions that treat synthetic positions as equity ownership
The threat of hedge fund activism, proxied by hedge funds' clicks on firms' SEC disclosure documents, predicts firms' adoptions of pills with anti-activist characteristics
Adoption of anti-activist pills is effective in reducing the likelihood of activists' intervention, CEO turnover and policies typically targeted by activists, such as higher payouts

Common Venture Capital Investors and Startup Growth, The Review of Financial Studies 37(2) (2024): 549-590 (with J. Grennan)

Within-industry VC investment and common directors serving on startup boards increased after the adoption of laws that permit liability waivers for investors that hold stakes in conflicting business opportunities
Despite the potential for rent-extraction, same-industry startups inside VC portfolios benefit by raising more capital, failing less, and exiting more successfully.
VC directors serving on other startup boards are the primary mechanism associated with positive outcomes, consistent with common VC investment facilitating informational exchanges in VC portfolios
Featured in Harvard Law School Forum on Corporate Governance and Financial Regulation

The Rise of Dual-Class Stock IPOs, Journal of Financial Economics 144(2) (2022): 122-153 (with D. Aggarwal, Y. Hochberg & L. Litov)

Dual-class firms have different types of controlling shareholders and wedges between voting and economic rights,
The increase in dual-class structures over time is driven by founder-controlled firms
The increase in founder control over time is due to greater availability of private capital and technological shocks that have reduced firms’ needs for external financing

Featured in Bloomberg’s Money Stuff, Financial Times, Columbia Blue Sky Blog, Oxford Business Law Blog, and JD Supra

Regulatory Competition and the Market for Corporate Law, American Economic Journal: Microeconomics 12(2) (2020): 60-98 (with L. Magnolfi)

Develops a structural model of heterogeneous firms' choices of corporate law under inertia
Larger firms prefer to incorporate in states that have fewer anti-takeover protections and liability protections
Counterfactual analysis shows that Delaware would lose market share if it adopted protectionist laws

Featured in Harvard Law School Forum on Corporate Governance and Financial Regulation

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