Investor Protection and Corporate Valuation

Rafael La Porta, Florencio Lopez-De-Silanes, Andrei Shleifer and Robert Vishny

Scholarly Articles from Harvard University Department of Economics

Abstract: Recent research has documented large differences among countries in ownership concentration in publicly traded firms, in the breadth and depth of capital markets, in dividend policies, and in the access of firms to external finance. A common element to the explanations of these differences is how well investors, both shareholders and creditors, are protected by law from expropriation by the managers and controlling shareholders of firms. We describe the differences in laws and the effectiveness of their enforcement across countries, discuss the possible origins of these differences, summarize their consequences, and assess potential strategies of corporate governance reform. We argue that the legal approach is a more fruitful way to understand corporate governance and its reform than the conventional distinction between bank-centered and market-centered financial systems.

Date: 2002
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Published in The Journal of Finance

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Related works:
Journal Article: Investor Protection and Corporate Valuation (2002)
Working Paper: Investor Protection and Corporate Valuation (1999)
Working Paper: Investor Protection and Corporate Valuation (1999)
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Persistent link: https://EconPapers.repec.org/RePEc:hrv:faseco:30747191

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