Shareholder Protection and Stock Market Development: An Empirical Test of the Legal Origins Hypothesis

John Armour, Simon Deakin, Prabirjit Sarkar (prabirjitsarkar@gmail.com), Mathias Siems and Ajit Singh
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John Armour: University of Oxford
Simon Deakin: University of Cambridge

No 41, WEF Working Papers from ESRC World Economy and Finance Research Programme, Birkbeck, University of London

Abstract: Using a panel dataset covering a range of developed and developing countries, we show that common law systems were more protective of shareholder interests than civil law ones in the period 1995-2005. However, civilian systems were catching up, suggesting that civil law origin was not much of an obstacle to convergence. We find no evidence of a long-run impact of legal change on stock market development. Possible explanations are that laws have been overly protective of shareholders; transplanted laws have not worked as expected; and, more generally, the exogenous legal origin effect is not as strong as widely supposed.

Keywords: law and finance; shareholder rights; shareholder protection; corporate governance; corporate finance; legal origins; comparative law; comparative economics (search for similar items in EconPapers)
Date: 2008-05
New Economics Papers: this item is included in nep-cfn
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Citations: View citations in EconPapers (23)

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Related works:
Journal Article: Shareholder Protection and Stock Market Development: An Empirical Test of the Legal Origins Hypothesis (2009)
Working Paper: Shareholder Protection and Stock Market Development: An Empirical Test of the Legal Origins Hypothesis (2007)
Working Paper: Shareholder protection and stockmarket development: an empirical test of the legal origins hypothesis (2007)
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