Law and Finance: Common Law and Civil Law Countries Compared—An Empirical Critique

Michael Graff

Economica, 2008, vol. 75, issue 297, 60-83

Abstract: The ‘theory of law and finance’ argues that the common law system provides a better framework for financial development and economic growth than the civil law tradition. This paper identifies a number of problems that cast doubt on the soundness of the empirical basis of this literature. However, this analysis supports the idea that the legal tradition is a major factor in shaping corporate law. In particular, while there is not much evidence that common law countries protect financial investors better than civil law countries I find support for the assumption that financial investors are treated differently across legal families.

Date: 2008
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https://doi.org/10.1111/j.1468-0335.2007.00596.x

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Persistent link: https://EconPapers.repec.org/RePEc:bla:econom:v:75:y:2008:i:297:p:60-83

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