Financial development in adversarial and inquisitorial legal systems

Baptiste Massenot ()

MPRA Paper from University Library of Munich, Germany

Abstract: This paper analyzes how the adversarial and inquisitorial evidence collection procedures affect financial development. In investigating the true returns of insolvent entrepreneurs, the adversarial procedure relies on lawyers whereas the inquisitorial procedure relies on judges. Investors are willing to lend more in adversarial than in inquisitorial legal systems if they are richer than entrepreneurs or if lawyers are more productive than judges. Manipulation of evidence by lawyers has an ambiguous impact on finance. The empirical evidence shows that a more inquisitorial procedure is associated with less developed financial markets.

Keywords: legal origin; financial development; adversarial; inquisitorial (search for similar items in EconPapers)
JEL-codes: K41 O16 (search for similar items in EconPapers)
Date: 2010
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Citations: View citations in EconPapers (1)

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Related works:
Journal Article: Financial development in adversarial and inquisitorial legal systems (2011)
Working Paper: Financial Development in Adversarial and Inquisitorial Legal Systems (2010)
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Persistent link: https://EconPapers.repec.org/RePEc:pra:mprapa:27098

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