The paper analyses the legal transfer of formal rules regulating stock markets in Spain between 1800 and 1936. We argue that the transfer of French legislation in the 1830s provoked a “transplant effect”, which generated serious distortions in Spanish financial markets. As a result, Spain developed a unique system in which official French style stock markets coexisted with Anglo-Saxon style free markets and small traditional markets, reminiscent of the ancien regime. This unique schism of systems reflects the result of multiple natural experiments whereby each region constituted its own stock market system. Diverse economic scenarios and path-dependence processes determined different institutional settings. We find that the unparalleled Spanish system was the result of lacking central power, persistence of institutional inertia, and the diversity of Spain´s geographical economy.
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Paper provided by Universidad Carlos III, Departamento de Historia Económica e Instituciones in its series Working Papers in Economic History with number
wp08-03.
Find related papers by JEL classification: N23 - Economic History - - Financial Markets and Institutions - - - Europe: Pre-1913 N24 - Economic History - - Financial Markets and Institutions - - - Europe: 1913- N43 - Economic History - - Government, War, Law, and Regulation - - - Europe: Pre-1913 N44 - Economic History - - Government, War, Law, and Regulation - - - Europe: 1913- K20 - Law and Economics - - Regulation and Business Law - - - General K22 - Law and Economics - - Regulation and Business Law - - - Corporation and Securities Law
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