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The "Antidirector Rights Index" Revisited*

* This paper is a replication of an original study

Author

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  • Holger Spamann

Abstract

The "antidirector rights index" has been used as a measure of shareholder protection in over a hundred articles since it was introduced by La Porta et al. ("Law and Finance." 1998, Journal of Political Economy 106:1113--55). A thorough reexamination of the legal data, however, leads to corrections for thirty-three of the forty-six countries analyzed. The correlation between corrected and original values is only 0.53. Consequently, many empirical results established using the original index may not be replicable with corrected values. In particular, the corrected index fails to support three widely influential claims: that shareholder protection is higher in common than in civil law countries; that shareholder protection predicts stock market size or ownership dispersion; and that weak corporate governance explains the extent of exchange rate depreciation during the Asian financial crisis of 1997--1998. The Author 2009. Published by Oxford University Press [on behalf of The Society for Financial Studies]. All rights reserved. For Permissions, please e-mail: journals.permissions@oxfordjournals.org., Oxford University Press.

Suggested Citation

  • Holger Spamann, 2010. "The "Antidirector Rights Index" Revisited," The Review of Financial Studies, Society for Financial Studies, vol. 23(2), pages 467-486, February.
    • Handle: RePEc:oup:rfinst:v:23:y:2010:i:2:p:467-486
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    File URL: http://hdl.handle.net/10.1093/rfs/hhp067
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    Replication

    This item is a replication of:
  • Rafael La Porta & Florencio Lopez-de-Silanes & Andrei Shleifer & Robert W. Vishny, 1998. "Law and Finance," Journal of Political Economy, University of Chicago Press, vol. 106(6), pages 1113-1155, December.

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    1. The Antidirector Rights Index Revisited (Review of Financial Studies 2010) in ReplicationWiki

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