Law, finance, economic growth and welfare: why does legal origin matter?

Simplice Asongu

MPRA Paper from University Library of Munich, Germany

Abstract: This paper proposes and empirically validates four theories of why legal origin influences growth and welfare through finance. It is a natural extension of “Law and finance: why does legal origin matter?” by Thorsten Beck, Asli Demirgüç-Kunt and Ross Levine (2003). We find only partial support for the Mundell(1972), La Porta et al. (1998) and Beck et al.(2003) hypotheses that English common-law countries tend to have better developed financial intermediaries than French civil-law countries. While countries with English legal tradition have legal systems that improve financial depth, activity and size, countries with French legal origin overwhelmingly dominate in financial intermediary allocation efficiency. Countries with Portuguese legal origin fall in-between.

Keywords: Law; Financial development; Growth; Welfare (search for similar items in EconPapers)
JEL-codes: G2 K2 K4 O1 P5 (search for similar items in EconPapers)
Date: 2011-08-18
New Economics Papers: this item is included in nep-dev, nep-fdg and nep-law
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (42)

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Related works:
Journal Article: Law,Finance, Economic Growth and Welfare: Why Does Legal Origin Matter? (2015)
Working Paper: Law, finance, economic growth and welfare: why does legal origin matter? (2011)
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Persistent link: https://EconPapers.repec.org/RePEc:pra:mprapa:33868

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