Advanced Search
MyIDEAS: Login to save this paper or follow this series

Shareholder Protection and Stock Market Development: An Empirical Test of the Legal Origins Hypothesis

Contents:

Author Info

  • John Armour

    (University of Oxford)

  • Simon Deakin

    (University of Cambridge)

  • Prabirjit Sarkar

    (Jadavpur University, Kolkata)

  • Mathias Siems

    (University of Edinburgh)

  • Ajit Singh

    (University of Cambridge)

Abstract

Using a panel dataset covering a range of developed and developing countries, we show that common law systems were more protective of shareholder interests than civil law ones in the period 1995-2005. However, civilian systems were catching up, suggesting that civil law origin was not much of an obstacle to convergence. We find no evidence of a long-run impact of legal change on stock market development. Possible explanations are that laws have been overly protective of shareholders; transplanted laws have not worked as expected; and, more generally, the exogenous legal origin effect is not as strong as widely supposed.

Download Info

If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
File URL: http://www.worldeconomyandfinance.org/working_papers_publications/working_paper_PDFs/WEF0041.pdf
Download Restriction: no

Bibliographic Info

Paper provided by ESRC World Economy and Finance Research Programme, Birkbeck, University of London in its series WEF Working Papers with number 0041.

as in new window
Length:
Date of creation: May 2008
Date of revision:
Handle: RePEc:wef:wpaper:0041

Contact details of provider:
Postal: Malet St, London WC1E 7HX
Phone: 4420-7631-6406
Fax: 4420-7631-6416
Web page: http://www.worldeconomyandfinance.org
More information through EDIRC

Related research

Keywords: law and finance; shareholder rights; shareholder protection; corporate governance; corporate finance; legal origins; comparative law; comparative economics;

Other versions of this item:

Find related papers by JEL classification:

This paper has been announced in the following NEP Reports:

References

References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
as in new window
  1. Rafael La Porta & Florencio Lopez-de-Silane & Andrei Shleifer & Robert Vishny, 1998. "Agency Problems and Dividend Policies Around the World," NBER Working Papers 6594, National Bureau of Economic Research, Inc.
  2. Djankov, Simeon & Glaeser, Edward & La Porta, Rafael & Lopez de Silanes, Florencio & Shleifer, Andrei, 2003. "The new comparative economics," Policy Research Working Paper Series 3054, The World Bank.
  3. Thorsten Beck & Ross Levine, 2004. "Legal Institutions and Financial Development," NBER Working Papers 10417, National Bureau of Economic Research, Inc.
  4. Stijn Claessens & Luc Laeven, 2003. "Financial Development, Property Rights, and Growth," Journal of Finance, American Finance Association, vol. 58(6), pages 2401-2436, December.
  5. Edward L. Glaeser & Andrei Shleifer, 2003. "The Rise of the Regulatory State," Journal of Economic Literature, American Economic Association, vol. 41(2), pages 401-425, June.
  6. Ross Levine, 1997. "Financial Development and Economic Growth: Views and Agenda," Journal of Economic Literature, American Economic Association, vol. 35(2), pages 688-726, June.
  7. Thorsten Beck & Asli Demirguc-Kunt, 2005. "Law and Firms' Access to Finance," American Law and Economics Review, Oxford University Press, vol. 7(1), pages 211-252.
  8. La Porta, Rafael & Florencio Lopez-de-Silanes & Andrei Shleifer & Robert W. Vishny, 1997. " Legal Determinants of External Finance," Journal of Finance, American Finance Association, vol. 52(3), pages 1131-50, July.
  9. Thorsten Beck & Asli Demirguc-Kunt & Ross Levine, 2002. "Law and Finance: why Does Legal Origin Matter?," NBER Working Papers 9379, National Bureau of Economic Research, Inc.
  10. Jack Glen & Ajit Singh, 2004. "Corporate Governance, Competition And Finance: Re-Thinking Lessons From The Asian Crisis," ESRC Centre for Business Research - Working Papers wp288, ESRC Centre for Business Research.
  11. Sonja Fagernäs & Prabirjit Sarkar & Ajit Singh, 2007. "Legal Origin, Shareholder Protection and the Stock Market: New Challenges from Time Series Analysis," ESRC Centre for Business Research - Working Papers wp343, ESRC Centre for Business Research.
  12. Priya P. Lele & Mathias M. Siems, 2007. "Diversity in Shareholder Protection in Common Law Countries," CESifo DICE Report, Ifo Institute for Economic Research at the University of Munich, vol. 5(1), pages 3-9, 05.
  13. Simeon Djankov & Rafael LaPorta & Florencio Lopez-de-Silanes & Andrei Shleifer, . "The Regulation of Entry," Working Paper 19462, Harvard University OpenScholar.
  14. Djankov, Simeon & McLiesh, Caralee & Shleifer, Andrei, 2007. "Private credit in 129 countries," Journal of Financial Economics, Elsevier, vol. 84(2), pages 299-329, May.
  15. Claessens, Stijn & Klapper, Leora F., 2002. "Bankruptcy around the World: Explanations of its Relative Use," CEI Working Paper Series 2002-17, Center for Economic Institutions, Institute of Economic Research, Hitotsubashi University.
  16. Mathias M. Siems, 2006. "Shareholder Protection Across Countries – Is the EU on the Right Track?," CESifo DICE Report, Ifo Institute for Economic Research at the University of Munich, vol. 4(3), pages 39-43, October.
  17. Beck, T.H.L. & Demirgüç-Kunt, A. & Levine, R., 2000. "A new database on financial development and structure," Open Access publications from Tilburg University urn:nbn:nl:ui:12-3125518, Tilburg University.
  18. Pagano, Marco & Volpin, Paolo, 2005. "Shareholder Protection, Stock Market Development and Politics," CEPR Discussion Papers 5378, C.E.P.R. Discussion Papers.
  19. Jack Glen & Ajit Singh, 2003. "Capital Structure, Rates of Return and Financing Corporate Growth: Comparing Developed and Emerging Markets, 1994-00," ESRC Centre for Business Research - Working Papers wp265, ESRC Centre for Business Research.
  20. Cheffins, Brian R, 2001. "Does Law Matter? The Separation of Ownership and Control in the United Kingdom," The Journal of Legal Studies, University of Chicago Press, vol. 30(2), pages 459-84, Part I Ju.
  21. Raghuram G. Rajan, 2006. "Competitive Rent Preservation, Reform Paralysis, and the Persistence of Underdevelopment," NBER Working Papers 12093, National Bureau of Economic Research, Inc.
  22. Edward L. Glaeser & Andrei Shleifer, 2002. "Legal Origins," The Quarterly Journal of Economics, MIT Press, vol. 117(4), pages 1193-1229, November.
  23. Sarkar, Prabirjit, 2007. "Stock Market Development and Capital Accumulation: Does Law Matter? A Case Study of India," MPRA Paper 5052, University Library of Munich, Germany.
  24. Lopez-de-Silanes, Florencio & Djankov, Simeon & La Porta, Rafael & Shleifer, Andrei, 2008. "The Law and Economics of Self-dealing," Scholarly Articles 2907526, Harvard University Department of Economics.
  25. Priya P. Lele & Mathias M. Siems, 2007. "Shareholder Protection: A Leximetric Approach," Money Macro and Finance (MMF) Research Group Conference 2006 170, Money Macro and Finance Research Group.
  26. Mathias Siems, 2007. "Shareholder Protection around the World ("Leximetric II")," ESRC Centre for Business Research - Working Papers wp359, ESRC Centre for Business Research.
  27. Simon Deakin & Priya Lele & Mathias Siems, 2007. "The Evolution of Labour Law: Calibrating and Comparing Regulatory Regimes," ESRC Centre for Business Research - Working Papers wp352, ESRC Centre for Business Research.
  28. Mahoney, Paul G, 2001. "The Common Law and Economic Growth: Hayek Might Be Right," The Journal of Legal Studies, University of Chicago Press, vol. 30(2), pages 503-25, Part I Ju.
  29. Beck, T.H.L. & Demirgüç-Kunt, A. & Levine, R., 2003. "Law, endowments, and finance," Open Access publications from Tilburg University urn:nbn:nl:ui:12-3125510, Tilburg University.
  30. Davin Chor & Richard B. Freeman, 2005. "The 2004 Global Labor Survey: Workplace Institutions and Practices Around the World," NBER Working Papers 11598, National Bureau of Economic Research, Inc.
  31. Ajit Singh & Bruce Weisse & Alaka Singh, 2002. "Corporate governance, competition, the new international financial architecture and large corporations in emerging markets," ESRC Centre for Business Research - Working Papers wp250, ESRC Centre for Business Research.
  32. Rajan, Raghuram G. & Zingales, Luigi, 2003. "The great reversals: the politics of financial development in the twentieth century," Journal of Financial Economics, Elsevier, vol. 69(1), pages 5-50, July.
  33. Erik BERGLÖF & Ernst-Ludwig VON THADDEN, 1999. "The Changing Corporate Governance Paradigm : Implications for Transition and Developing Countries," Cahiers de Recherches Economiques du Département d'Econométrie et d'Economie politique (DEEP) 9912, Université de Lausanne, Faculté des HEC, DEEP.
Full references (including those not matched with items on IDEAS)

Citations

Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
as in new window

Cited by:
This item has more than 25 citations. To prevent cluttering this page, these citations are listed on a separate page.

Lists

This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

Statistics

Access and download statistics

Corrections

When requesting a correction, please mention this item's handle: RePEc:wef:wpaper:0041. See general information about how to correct material in RePEc.

For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Tim Byne).

If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

If references are entirely missing, you can add them using this form.

If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.

If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.

Please note that corrections may take a couple of weeks to filter through the various RePEc services.