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The law and economics of self-dealing

Listed author(s):
  • Djankov, Simeon
  • La Porta, Rafael
  • Lopez-de-Silanes, Florencio
  • Shleifer, Andrei

We present a new measure of legal protection of minority shareholders against expropriation by corporate insiders: the anti-self-dealing index. Assembled with the help of Lex Mundi law firms, the index is calculated for 72 countries based on legal rules prevailing in 2003, and focuses on private enforcement mechanisms, such as disclosure, approval, and litigation, that govern a specific self-dealing transaction. This theoretically grounded index predicts a variety of stock market outcomes, and generally works better than the previously introduced index of anti-director rights.

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File URL: http://www.sciencedirect.com/science/article/pii/S0304-405X(08)00016-0
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Article provided by Elsevier in its journal Journal of Financial Economics.

Volume (Year): 88 (2008)
Issue (Month): 3 (June)
Pages: 430-465

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Handle: RePEc:eee:jfinec:v:88:y:2008:i:3:p:430-465
Contact details of provider: Web page: http://www.elsevier.com/locate/inca/505576

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  1. Simeon Djankov & Rafael La Porta & Florencio LopezdeSilanes & Andrei Shleifer, 2000. "The Regulation of Entry," NBER Working Papers 7892, National Bureau of Economic Research, Inc.
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  4. Simeon Djankov & Edward L. Glaeser & Rafael La Porta & Florencio Lopez-de-Silane & Andrei Shleifer, 2003. "The New Comparative Economics," NBER Working Papers 9608, National Bureau of Economic Research, Inc.
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