Why do French civil-law countries have higher levels of financial efficiency?

Simplice Asongu

No 11/011, Working Papers of the African Governance and Development Institute. from African Governance and Development Institute.

Abstract: The dominance of English common-law countries in prospects for financial development in the legal-origins debate has been debunked by recent findings. Using exchange rate regimes and economic/monetary integration oriented hypotheses, this paper proposes an “inflation uncertainty theory” in providing theoretical justification and empirical validity as to why French civil-law countries have higher levels of financial allocation efficiency. Inflation uncertainty, typical of floating exchange rate regimes accounts for the allocation inefficiency of financial intermediary institutions in English common-law countries. As a policy implication, results support the benefits of fixed exchange rate regimes in financial intermediary allocation efficiency.

Keywords: Banking; allocation efficiency; exchange rate; inflation; economic integration (search for similar items in EconPapers)
JEL-codes: D61 G20 K00 P50 R10 (search for similar items in EconPapers)
Pages: 27
Date: 2011-10-12
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Citations: View citations in EconPapers (75)

Published in Journal of Advanced Research in Law and Economics

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http://www.afridev.org/RePEc/agd/agd-wpaper/Why-do ... ncial-efficiency.pdf Revised version, 2013 (application/pdf)

Related works:
Journal Article: WHY DO FRENCH CIVIL LAW COUNTRIES HAVE HIGHER LEVELS OF FINANCIAL EFFICIENCY (2011)
Working Paper: Why do French civil-law countries have higher levels of financial efficiency? (2011)
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