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Legal Determinants of External Finance Revisited: The Inverse Relationship Between Investor Protection and Societal Well-Being

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  • David Collison

    ()

  • Stuart Cross

    ()

  • John Ferguson

    ()

  • David Power

    ()

  • Lorna Stevenson

    ()

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    Abstract

    This article investigates relationships between countries’ legal traditions and their quality of life as measured by a number of widely reported social indicators; in so doing it also offers a critique of a highly influential body of work which is widely cited in the literatures of corporate governance, economics and finance. That body of work has shown, inter alia, statistically significant relationships between legal traditions and various proxies for investor protection. We show statistically significant relationships between legal traditions and various proxies for societal health. Our comparative evidence suggests that the interests of investors are not congruent with the interests of wider society, and that the criteria for judging the effectiveness of approaches to corporate governance should be broadened. Copyright Springer Science+Business Media B.V. 2012

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    File URL: http://hdl.handle.net/10.1007/s10551-011-1098-0
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    Bibliographic Info

    Article provided by Springer in its journal Journal of Business Ethics.

    Volume (Year): 108 (2012)
    Issue (Month): 3 (July)
    Pages: 393-410

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    Handle: RePEc:kap:jbuset:v:108:y:2012:i:3:p:393-410

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    Web page: http://www.springerlink.com/link.asp?id=100281

    Related research

    Keywords: Legal traditions; Social indicators; Social accounting; Investor protection; Corporate governance;

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