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

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  • David Collison

    ()

  • Stuart Cross

    ()

  • John Ferguson

    ()

  • David Power

    ()

  • Lorna Stevenson

    ()

Abstract

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

Suggested Citation

  • David Collison & Stuart Cross & John Ferguson & David Power & Lorna Stevenson, 2012. "Legal Determinants of External Finance Revisited: The Inverse Relationship Between Investor Protection and Societal Well-Being," Journal of Business Ethics, Springer, vol. 108(3), pages 393-410, July.
  • Handle: RePEc:kap:jbuset:v:108:y:2012:i:3:p:393-410
    DOI: 10.1007/s10551-011-1098-0
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    References listed on IDEAS

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    Cited by:

    1. Carl J. Kock & Byung S. Min, 2016. "Legal Origins, Corporate Governance, and Environmental Outcomes," Journal of Business Ethics, Springer, vol. 138(3), pages 507-524, October.
    2. repec:kap:jbuset:v:143:y:2017:i:1:d:10.1007_s10551-017-3549-8 is not listed on IDEAS

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