IDEAS home Printed from https://ideas.repec.org/
MyIDEAS: Login to save this article or follow this journal

Legal Determinants of External Finance Revisited: The Inverse Relationship Between Investor Protection and Societal Well-Being

  • David Collison

    ()

  • Stuart Cross

    ()

  • John Ferguson

    ()

  • David Power

    ()

  • Lorna Stevenson

    ()

Registered author(s):

    This article investigates relationships between countries’ legal traditions and their quality of life as measured by a number of widely reported social indicators; in so doing it also offers a critique of a highly influential body of work which is widely cited in the literatures of corporate governance, economics and finance. That body of work has shown, inter alia, statistically significant relationships between legal traditions and various proxies for investor protection. We show statistically significant relationships between legal traditions and various proxies for societal health. Our comparative evidence suggests that the interests of investors are not congruent with the interests of wider society, and that the criteria for judging the effectiveness of approaches to corporate governance should be broadened. Copyright Springer Science+Business Media B.V. 2012

    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://hdl.handle.net/10.1007/s10551-011-1098-0
    Download Restriction: Access to full text is restricted to subscribers.

    As the access to this document is restricted, you may want to look for a different version under "Related research" (further below) or search for a different version of it.

    Article provided by Springer in its journal Journal of Business Ethics.

    Volume (Year): 108 (2012)
    Issue (Month): 3 (July)
    Pages: 393-410

    as
    in new window

    Handle: RePEc:kap:jbuset:v:108:y:2012:i:3:p:393-410
    Contact details of provider: Web page: http://www.springerlink.com/link.asp?id=100281

    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. Ben-Chieh Liu, 1974. "Quality of life indicators: A preliminary investigation," Social Indicators Research, Springer, vol. 1(2), pages 187-208, September.
    2. 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.
    3. 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.
    4. King, Robert G. & Levine, Ross, 1993. "Finance and growth : Schumpeter might be right," Policy Research Working Paper Series 1083, The World Bank.
    5. Levine, Ross, 1998. "The Legal Environment, Banks, and Long-Run Economic Growth," Journal of Money, Credit and Banking, Blackwell Publishing, vol. 30(3), pages 596-613, August.
    6. Rafael La Porta & Florencio Lopez-de-Silanes & Andrei Shleifer & Robert W. Vishny, 2000. "Agency Problems and Dividend Policies around the World," Journal of Finance, American Finance Association, vol. 55(1), pages 1-33, 02.
    7. Andrei Shleifer & Robert W. Vishny, 1998. "The Quality of Government," Harvard Institute of Economic Research Working Papers 1847, Harvard - Institute of Economic Research.
    8. Hsiang-Lin Chih & Hsiang-Hsuan Chih & Tzu-Yin Chen, 2010. "On the Determinants of Corporate Social Responsibility: International Evidence on the Financial Industry," Journal of Business Ethics, Springer, vol. 93(1), pages 115-135, April.
    9. Ross Levine & Sara Zervos, . "Stock markets, banks and economic growth ," CERF Discussion Paper Series 95-11, Economics and Finance Section, School of Social Sciences, Brunel University.
    10. Rafael La Porta & Florencio Lopez-deSilanes & Andrei Shleifer & Robert W. Vishny, 1999. "Investor Protection and Corporate Valuation," NBER Working Papers 7403, National Bureau of Economic Research, Inc.
    11. Michael C. Jensen, 2001. "Value Maximization, Stakeholder Theory, And The Corporate Objective Function," Journal of Applied Corporate Finance, Morgan Stanley, vol. 14(3), pages 8-21.
    12. Dore, Ronald & Lazonick, William & O'Sullivan, Mary, 1999. "Varieties of Capitalism in the Twentieth Century," Oxford Review of Economic Policy, Oxford University Press, vol. 15(4), pages 102-20, Winter.
    13. King, Robert G. & Levine, Ross, 1993. "Finance and growth : Schumpeter might be right," Policy Research Working Paper Series 1083, The World Bank.
    14. Ed Diener & Eunkook Suh, 1997. "Measuring Quality Of Life: Economic, Social, And Subjective Indicators," Social Indicators Research, Springer, vol. 40(1), pages 189-216, January.
    15. Jensen, Michael C. & Meckling, William H., 1976. "Theory of the firm: Managerial behavior, agency costs and ownership structure," Journal of Financial Economics, Elsevier, vol. 3(4), pages 305-360, October.
    16. Raghuram G. Rajan & Luigi Zingales, 1994. "What Do We Know About Capital Structure? Some Evidence from International Data," NBER Working Papers 4875, National Bureau of Economic Research, Inc.
    17. Rafael LaPorta & Florencio Lopez-de-Silanes & Andrei Shleifer & Robert W. Vishny, . "Legal Determinants of External Finance," Working Paper 19443, Harvard University OpenScholar.
    18. Rafael LaPorta & Florencio Lopez-de-Silanes & Andrei Shleifer, . "What Works in Securities Laws?," Working Paper 19491, Harvard University OpenScholar.
    19. Itzhak Galnoor, 1974. "Social indicators for social planning: The case of Israel," Social Indicators Research, Springer, vol. 1(1), pages 27-57, May.
    20. Shleifer, Andrei & Vishny, Robert W, 1997. " A Survey of Corporate Governance," Journal of Finance, American Finance Association, vol. 52(2), pages 737-83, June.
    21. Rafael La Porta & Florencio Lopez-De-Silanes & Andrei Shleifer, 1999. "Corporate Ownership Around the World," Journal of Finance, American Finance Association, vol. 54(2), pages 471-517, 04.
    22. Lopez-de-Silanes, Florencio & La Porta, Rafael & Shleifer, Andrei, 2008. "The Economic Consequences of Legal Origins," Scholarly Articles 2962610, Harvard University Department of Economics.
    23. Glatzer, Wolfgang, 1981. "An overview of the international development in macro social indicators," Accounting, Organizations and Society, Elsevier, vol. 6(3), pages 219-234, July.
    24. Matti Keloharju, 2008. "What's New in Finance?," European Financial Management, European Financial Management Association, vol. 14(3), pages 564-608.
    25. Joseph Goeke, 1974. "Some neglected social indicators," Social Indicators Research, Springer, vol. 1(1), pages 85-105, May.
    26. Stanley Seashore, 1974. "Job satisfaction as an indicator of the quality of employment," Social Indicators Research, Springer, vol. 1(2), pages 135-168, September.
    27. David Collison & Colin Dey & Gwen Hannah & Lorna Stevenson, 2010. "Anglo-American capitalism: the role and potential role of social accounting," Accounting, Auditing & Accountability Journal, Emerald Group Publishing, vol. 23(8), pages 956-981, October.
    28. Edward L. Glaeser & Rafael La Porta & Florencio Lopez-de-Silane & Andrei Shleifer, 2004. "Do Institutions Cause Growth?," NBER Working Papers 10568, National Bureau of Economic Research, Inc.
    29. Gregory Jackson & Androniki Apostolakou, 2010. "Corporate Social Responsibility in Western Europe: An Institutional Mirror or Substitute?," Journal of Business Ethics, Springer, vol. 94(3), pages 371-394, July.
    30. Andy C W Chui & Alison E Lloyd & Chuck C Y Kwok, 2002. "The Determination of Capital Structure: Is National Culture a Missing Piece to the Puzzle?," Journal of International Business Studies, Palgrave Macmillan, vol. 33(1), pages 99-127, March.
    31. Pierre-Yves Gomez & Harry Korine, 2005. "Democracy and the Evolution of Corporate Governance," Corporate Governance: An International Review, Wiley Blackwell, vol. 13(6), pages 739-752, November.
    32. David Christian, 1974. "International social indicators: The OECD experience," Social Indicators Research, Springer, vol. 1(2), pages 169-186, September.
    Full references (including those not matched with items on IDEAS)

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

    When requesting a correction, please mention this item's handle: RePEc:kap:jbuset:v:108:y:2012:i:3:p:393-410. 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: (Sonal Shukla)

    or (Christopher F. Baum)

    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.

    This information is provided to you by IDEAS at the Research Division of the Federal Reserve Bank of St. Louis using RePEc data.