Corporations and Social Costs: The Wal-Mart Case Study


This article examines the role of the corporate vehicle in the creation of social costs. The article identifies some of the political commitments and philosophies behind the differing notions of corporations. Social costs are those activities which result from business activity and cause uncompensated harm to society. The founding contribution to the law and economics discussion by Ronald Coase is given a thorough treatment. The paper next, turns to the dominant explanation of corporate structure, namely the law and economics model developed expounded by Easterbrook and Fischel. It then applies the theoretical discussion in a case study of the world’s largest corporation, WAL-MART, Inc. It next examines the relation of social costs and corporate legal structure. It concludes with some recommendations for corporate reform.


Accounting Law | Antitrust and Trade Regulation | Business Organizations Law | Commercial Law | Consumer Protection Law | Criminal Law | Economics | Housing Law | Human Rights Law | International Trade Law | Labor and Employment Law | Law | Law and Economics | Law and Politics | Law and Society

Date of this Version

September 2006