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Law and Finance in Africa

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  • Asongu Simplice

    ()
    (Yaoundé/Cameroun)

Abstract

This paper assesses how legal origin influences financial development through regulation quality and the rule of law. It employs all the dimensions identified by the Financial Development and Structure Database of the World Bank. The law channels are instrumented with legal origins to account for financial intermediary dynamics of depth, efficiency, activity and size. The results broadly support the benefits of law mechanisms in financial development. The findings only show partial support for the consensus that English common law countries provide better conditions for financial development. While they dominate in dynamics of depth, activity and size, French civil law countries have an edge in financial allocation efficiency. Portuguese civil law countries broadly fall in-between. With the exception of financial efficiency, French civil law sub-Saharan African (SSA) countries are least while North African countries dominate even English common law countries in financial intermediary aspects of depth and activity. French SSA countries dominate overall in allocation efficiency.

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File URL: http://www.afridev.org/RePEc/agd/agd-wpaper/Law-and-finance-Africa.pdf
File Function: Revised version, 2013
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Bibliographic Info

Paper provided by African Governance and Development Institute. in its series Working Papers with number 11/009.

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Length: 34
Date of creation: 28 Sep 2011
Date of revision:
Publication status: Published in Brussels Economic Review
Handle: RePEc:agd:wpaper:11/009

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Keywords: Law; Finance; Banks; Africa;

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References

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  1. Asongu Simplice, 2012. "Financial development dynamic thresholds of financial globalization: evidence from Africa," Working Papers 12/020, African Governance and Development Institute..
  2. Berkowitz, Daniel & Pistor, Katharina & Richard, Jean-Francois, 2003. "Economic development, legality, and the transplant effect," European Economic Review, Elsevier, vol. 47(1), pages 165-195, February.
  3. Mathias Siems & Simon Deakin, 2010. "Comparative Law and Finance: Past, Present, and Future Research," Journal of Institutional and Theoretical Economics (JITE), Mohr Siebeck, Tübingen, vol. 166(1), pages 120-140, March.
  4. Rafael La Porta & Florencio Lopez-de-Silanes & Andrei Shleifer & Robert Vishny, 1998. "The Quality of Goverment," NBER Working Papers 6727, National Bureau of Economic Research, Inc.
  5. Asongu Simplice, 2011. "Government Quality Determinants of Stock Market Performance in African Countries," Working Papers 11/019, African Governance and Development Institute..
  6. Simplice A Asongu, 2012. "On the effect of foreign aid on corruption," Economics Bulletin, AccessEcon, vol. 32(3), pages 2174-2180.
  7. J.A. Agbor & J. W. Fedderke & N. Viegi, 2010. "How Does Colonial Origin Matter for Economic Performance in sub-Saharan Africa?," Working Papers 176, Economic Research Southern Africa.
  8. 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.
  9. King, Robert G & Levine, Ross, 1993. "Finance and Growth: Schumpeter Might Be Right," The Quarterly Journal of Economics, MIT Press, vol. 108(3), pages 717-37, August.
  10. Rajan, Raghuram G & Zingales, Luigi, 1998. "Financial Dependence and Growth," American Economic Review, American Economic Association, vol. 88(3), pages 559-86, June.
  11. Simplice A., Asongu, 2011. "Law, finance, economic growth and welfare: why does legal origin matter?," MPRA Paper 33868, University Library of Munich, Germany.
  12. Beck, Thorsten & Demirguc-Kunt, Asli & Levine, Ross, 2003. "Law and finance: why does legal origin matter?," Journal of Comparative Economics, Elsevier, vol. 31(4), pages 653-675, December.
  13. Asongu Simplice, 2012. "Globalization, (fighting) corruption and development: how are these phenomena linearly and nonlinearly related in wealth effects?," Working Papers 12/024, African Governance and Development Institute..
  14. Asli Demirgüç-Kunt & Vojislav Maksimovic, 1998. "Law, Finance, and Firm Growth," Journal of Finance, American Finance Association, vol. 53(6), pages 2107-2137, December.
  15. Asongu Simplice, 2012. "Fighting software piracy in Africa: how do legal origins and IPRs protection channels matter?," Working Papers 12/016, African Governance and Development Institute..
  16. Simplice A, Asongu, 2012. "Real and Monetary Policy Convergence: EMU Crisis to the CFA Zone," MPRA Paper 36051, University Library of Munich, Germany.
  17. La Porta, Rafael & Lopez-de-Silanes, Florencio & Shleifer, Andrei & Vishny, Robert, 2000. "Investor protection and corporate governance," Journal of Financial Economics, Elsevier, vol. 58(1-2), pages 3-27.
  18. Jayaratne, Jith & Strahan, Philip E, 1996. "The Finance-Growth Nexus: Evidence from Bank Branch Deregulation," The Quarterly Journal of Economics, MIT Press, vol. 111(3), pages 639-70, August.
  19. Beck, T.H.L. & Levine, R., 2002. "Industry growth and capital allocation: Does having a market- or bank-based system matter?," Open Access publications from Tilburg University urn:nbn:nl:ui:12-3125514, Tilburg University.
  20. Allen, Franklin & Qian, Jun & Qian, Meijun, 2005. "Law, finance, and economic growth in China," Journal of Financial Economics, Elsevier, vol. 77(1), pages 57-116, July.
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