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Law and Finance in Africa

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  • Simplice A. Asongu

Abstract

ABSTRACT :This paper assesses how legal origin influences financial development through regulationquality and the rule of law. It employs all the dimensions identified by the FinancialDevelopment and Structure Database of the World Bank. The law channels are instrumentedwith legal origins to account for financial intermediary dynamics of depth, efficiency, activityand 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 countriesprovide 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 financialefficiency, French civil law sub-Saharan African (SSA) countries are least while North Africancountries dominate even English common law countries in financial intermediary aspects ofdepth and activity. French SSA countries dominate overall in allocation efficiency.

Suggested Citation

  • Simplice A. Asongu, 2012. "Law and Finance in Africa," Brussels Economic Review, ULB -- Universite Libre de Bruxelles, vol. 55(4), pages 385-408.
    • Handle: RePEc:bxr:bxrceb:2013/156283
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    More about this item

    Keywords

    Law; Finance; Banks; Africa;
    All these keywords.

    JEL classification:

    • G20 - Financial Economics - - Financial Institutions and Services - - - General
    • K20 - Law and Economics - - Regulation and Business Law - - - General
    • K40 - Law and Economics - - Legal Procedure, the Legal System, and Illegal Behavior - - - General
    • O10 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - General
    • P50 - Political Economy and Comparative Economic Systems - - Comparative Economic Systems - - - General

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