Law and Finance: What Matters? Hong Kong as a Test Case

Yeung Horace and Huang Flora Xiao
Additional contact information
Yeung Horace: University of Exeter
Huang Flora Xiao: University of Hull

Asian Journal of Law and Economics, 2012, vol. 3, issue 1, 30

Abstract: This paper, using Hong Kong as a test case, challenges one conventional theory and confirms another one in law and finance study: (i) legal families in relation to stock market development; (ii) transplant effect of foreign laws. Economists, most notably La Porta and colleagues, allege that common law systems can offer superior investor protection and thereby facilitate the rise of financial markets. Undeniably, the legal system of Hong Kong, which was inherited from England, belongs to the common law family and is widely considered as one of Hong Kong’s advantages. Nonetheless, the high concentration of family ownership among Hong Kong companies implies that its system is not entirely Anglo-Saxon. Moreover, legal scholars, most notably Pistor and colleagues, claim that the import of laws from a developed system (legal transplantation) will have little impact unless there is such a demand in the first place. Interestingly, for Hong Kong, the transformation of a small fishing village in the mid-nineteenth century to a financial service-oriented economy nowadays is an illustration of the existence of demand in corporate and financial laws. By absorbing the nutrients from English legal traditions, American style of intense public enforcement and the flexibility of Chinese family businesses, Hong Kong has successfully established itself as one of the most crucial financial centers in the world.

Keywords: Hong Kong; law and finance; legal origins; legal transplantation; Chinese family businesses (search for similar items in EconPapers)
Date: 2012
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
https://doi.org/10.1515/2154-4611.1069 (text/html)
For access to full text, subscription to the journal or payment for the individual article is required.

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:bpj:ajlecn:v:3:y:2012:i:1:n:1

Ordering information: This journal article can be ordered from
https://www.degruyter.com/journal/key/ajle/html

DOI: 10.1515/2154-4611.1069

Access Statistics for this article

Asian Journal of Law and Economics is currently edited by Noriyuki Yanagawa

More articles in Asian Journal of Law and Economics from De Gruyter
Bibliographic data for series maintained by Peter Golla ().