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The Economic Effects of Improving Investor Rights in Portugal

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  • CASTRO, Rui
  • CLEMENTI, Gian Luca

Abstract

The Portuguese economy has performed remarkably well since joining the EU in 1986. Output per worker grew at an annual rate of 2.25%. The relative price of investment has declined. Real investment has increased compared to output, in part fuelled by an increase in capital inflows. At the same time, resource allocation seems to have improved as well: firm-level data shows a significant decline in the dispersion of labor productivity and size across firms. This paper argues that improvements in outside investor rights that have taken place since Portugal joined the EU is a prime candidate to explain this set of facts.

Suggested Citation

  • CASTRO, Rui & CLEMENTI, Gian Luca, 2009. "The Economic Effects of Improving Investor Rights in Portugal," Cahiers de recherche 2009-07, Universite de Montreal, Departement de sciences economiques.
    • Handle: RePEc:mtl:montde:2009-07
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    File URL: http://hdl.handle.net/1866/3992
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    Blog mentions

    As found by EconAcademics.org, the blog aggregator for Economics research:
    1. Attracting FDI to Portugal
      by Rui L Castro in The Portuguese Economy on 2010-03-04 23:20:00
    2. Attracting FDI to Portugal
      by Rui L Castro in The Portuguese Economy on 2010-03-04 23:20:00

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    Cited by:

    1. Francisco J. Buera & Yongseok Shin, 2017. "Productivity Growth and Capital Flows: The Dynamics of Reforms," American Economic Journal: Macroeconomics, American Economic Association, vol. 9(3), pages 147-185, July.
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    3. Pavel Ševcík, 2012. "Financial Contracts and the Political Economy of Investor Protection," American Economic Journal: Macroeconomics, American Economic Association, vol. 4(4), pages 163-197, October.

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    More about this item

    Keywords

    Macroeconomics; Investment Rate; Relative Prices; Resource Misallocation; Investor Protection; Optimal Contracts; Portugal;
    All these keywords.

    JEL classification:

    • E22 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Investment; Capital; Intangible Capital; Capacity
    • F43 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - Economic Growth of Open Economies
    • G32 - Financial Economics - - Corporate Finance and Governance - - - Financing Policy; Financial Risk and Risk Management; Capital and Ownership Structure; Value of Firms; Goodwill
    • G38 - Financial Economics - - Corporate Finance and Governance - - - Government Policy and Regulation
    • O16 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Financial Markets; Saving and Capital Investment; Corporate Finance and Governance
    • O17 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Formal and Informal Sectors; Shadow Economy; Institutional Arrangements
    • O41 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - One, Two, and Multisector Growth Models

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