Investor Protection and Equity Markets

Andrei Shleifer and Daniel Wolfenson

No 7974, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: We present a simple model of an entrepreneur going public in an environment with poor legal protection of outside shareholders. The model incorporates elements of Becker's (1968) crime and punishment' framework into a corporate finance environment of Jensen and Meckling (1976). We examine the entrepreneur's decision and the market equilibrium. The model is consistent with a number of empirical regularities concerning the relationship between investor protection and corporate finance.

JEL-codes: G31 G32 (search for similar items in EconPapers)
Date: 2000-10
Note: CF
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (21)

Published as Shleifer, Andrei & Wolfenzon, Daniel, 2002. "Investor protection and equity markets," Journal of Financial Economics, Elsevier, vol. 66(1), pages 3-27, October.

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Journal Article: Investor protection and equity markets (2002)
Working Paper: Investor Protection and Equity Markets (2000)
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