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Why do French civil-law countries have higher levels of financial efficiency?

  • Asongu Simplice

    ()

    (Yaoundé/Cameroun)

The dominance of English common-law countries in prospects for financial development in the legal-origins debate has been debunked by recent findings. Using exchange rate regimes and economic/monetary integration oriented hypotheses, this paper proposes an “inflation uncertainty theory” in providing theoretical justification and empirical validity as to why French civil-law countries have higher levels of financial allocation efficiency. Inflation uncertainty, typical of floating exchange rate regimes accounts for the allocation inefficiency of financial intermediary institutions in English common-law countries. As a policy implication, results support the benefits of fixed exchange rate regimes in financial intermediary allocation efficiency.

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File URL: http://www.afridev.org/RePEc/agd/agd-wpaper/Why-do-french-civil-law-countries-have-higher-levels-of-financial-efficiency.pdf
File Function: Revised version, 2013
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Paper provided by African Governance and Development Institute. in its series Working Papers with number 11/011.

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Length: 27
Date of creation: 12 Oct 2011
Date of revision:
Publication status: Published in Journal of Advanced Research in Law and Economics
Handle: RePEc:agd:wpaper:11/011
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