Takeover laws and financial development

Tatiana Nenova

No 4029, Policy Research Working Paper Series from The World Bank

Abstract: The issue of"an appropriate"legal framework, especially in the case of the takeover market, has been poorly studied in the case of emerging markets, yet it is of immediate relevance and practical policymaker interest. The study makes a first attempt to analyze takeover regulations in a comparative context across 50 countries. It proposes a methodology to create a detailed index on the most salient features of capital market laws, and illustrates the approach on the case of takeover legislation. The methodology allows better understanding of the impact of laws on markets and development, allows a detailed quantification of a given regulation, in this casetakeover market rules, and helps determine relevant policy implications. Specifically, the framework permits the exploration of the effects of individual regulations, their substitutability and interplay, as well as the overall extent of friendliness of the laws to investors, or particular groups thereof (such as minority shareholders), and the links of specialized regulation with the overall legal system. Finally, the study explores the effect of the investor-friendliness of takeover laws on stock market development.

Keywords: Corporate Law; Economic Theory&Research; Investment and Investment Climate; Markets and Market Access; Small Scale Enterprise (search for similar items in EconPapers)
Date: 2006-10-01
New Economics Papers: this item is included in nep-dev, nep-fmk and nep-reg
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (22)

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