IDEAS home Printed from https://ideas.repec.org/
MyIDEAS: Login to save this paper

Shareholder Protection and Stock Market Development: An Empirical Test of the Legal Origins Hypothesis

  • John Armour

    (University of Oxford)

  • Simon Deakin

    (University of Cambridge)

  • Prabirjit Sarkar

    (Jadavpur University, Kolkata)

  • Mathias Siems

    (University of Edinburgh)

  • Ajit Singh

    (University of Cambridge)

Using a panel dataset covering a range of developed and developing countries, we show that common law systems were more protective of shareholder interests than civil law ones in the period 1995-2005. However, civilian systems were catching up, suggesting that civil law origin was not much of an obstacle to convergence. We find no evidence of a long-run impact of legal change on stock market development. Possible explanations are that laws have been overly protective of shareholders; transplanted laws have not worked as expected; and, more generally, the exogenous legal origin effect is not as strong as widely supposed.

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://www.worldeconomyandfinance.org/working_papers_publications/working_paper_PDFs/WEF0041.pdf
Download Restriction: no

Paper provided by ESRC World Economy and Finance Research Programme, Birkbeck, University of London in its series WEF Working Papers with number 0041.

as
in new window

Length:
Date of creation: May 2008
Date of revision:
Handle: RePEc:wef:wpaper:0041
Contact details of provider: Postal:
Malet St, London WC1E 7HX

Phone: 4420-7631-6406
Fax: 4420-7631-6416
Web page: http://www.worldeconomyandfinance.org

More information through EDIRC

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. Mathias Siems & Priya Lele, 2006. "Shareholder Protection: A Leximetric Approach," ESRC Centre for Business Research - Working Papers wp324, ESRC Centre for Business Research.
  2. Edward L. Glaeser & Andrei Shleifer, 2003. "The Rise of the Regulatory State," Journal of Economic Literature, American Economic Association, vol. 41(2), pages 401-425, June.
  3. Edward L. Glaeser & Andrei Shleifer, 2002. "Legal Origins," The Quarterly Journal of Economics, Oxford University Press, vol. 117(4), pages 1193-1229.
  4. Mahoney, Paul G, 2001. "The Common Law and Economic Growth: Hayek Might Be Right," The Journal of Legal Studies, University of Chicago Press, vol. 30(2), pages 503-25, Part I Ju.
  5. Simeon Djankov & Rafael LaPorta & Florencio Lopez-de-Silanes & Andrei Shleifer, 2005. "The Law and Economics of Self-Dealing," NBER Working Papers 11883, National Bureau of Economic Research, Inc.
  6. Davin Chor & Richard B. Freeman, 2005. "The 2004 Global Labor Survey : Workplace Institutions and Practices Around the World," Labor Economics Working Papers 22066, East Asian Bureau of Economic Research.
  7. Simeon Djankov & Rafael La Porta & Florencio Lopez-de-Silanes & Andre Shleifer, 2000. "The Regulation of Entry," Harvard Institute of Economic Research Working Papers 1904, Harvard - Institute of Economic Research.
  8. Jack Glen & Ajit Singh, 2003. "Capital Structure, Rates of Return and Financing Corporate Growth: Comparing Developed and Emerging Markets, 1994-00," ESRC Centre for Business Research - Working Papers wp265, ESRC Centre for Business Research.
  9. Rajan, Raghuram G. & Zingales, Luigi, 2003. "The great reversals: the politics of financial development in the twentieth century," Journal of Financial Economics, Elsevier, vol. 69(1), pages 5-50, July.
  10. Rafael La Porta & Florencio Lopez-de-Silane & Andrei Shleifer & Robert Vishny, 1998. "Agency Problems and Dividend Policies Around the World," NBER Working Papers 6594, National Bureau of Economic Research, Inc.
  11. Thorsten Beck & Asli Demirguc-Kunt, 2005. "Law and Firms' Access to Finance," American Law and Economics Review, Oxford University Press, vol. 7(1), pages 211-252.
  12. Claessens, Stijn & Klapper, Leora F., 2002. "Bankruptcy around the World: Explanations of its Relative Use," CEI Working Paper Series 2002-17, Center for Economic Institutions, Institute of Economic Research, Hitotsubashi University.
  13. Marco Pagano & Paolo Volpin, 2005. "Shareholder Protection, Stock Market Development, and Politics," CSEF Working Papers 149, Centre for Studies in Economics and Finance (CSEF), University of Naples, Italy.
  14. Simeon Djankov & Caralee McLiesh & Andrei Shleifer, 2005. "Private Credit in 129 Countries," NBER Working Papers 11078, National Bureau of Economic Research, Inc.
  15. Jack Glen & Ajit Singh, 2005. "Corporate Governance, Competition, and Finance: Re-thinking Lessons from the Asian Crisis," Eastern Economic Journal, Eastern Economic Association, vol. 31(2), pages 219-243, Spring.
  16. Simeon Djankov & Edward L. Glaeser & Rafael La Porta & Florencio Lopez-de-Silanes & Andrei Shleifer, 2003. "The New Comparative Economics," Harvard Institute of Economic Research Working Papers 2002, Harvard - Institute of Economic Research.
  17. Sonja Fagernas & Prabirjit Sarkar & Ajit Singh, 2007. "Legal Origin, Shareholder Protection and the Stock Market: New Challenges from Time Series Analysis," WEF Working Papers 0023, ESRC World Economy and Finance Research Programme, Birkbeck, University of London.
  18. Raghuram G. Rajan, 2006. "Competitive Rent Preservation, Reform Paralysis, and the Persistence of Underdevelopment," NBER Working Papers 12093, National Bureau of Economic Research, Inc.
  19. Singh, Ajit & Singh, Alaka & Weisse, Bruce, 2002. "Corporate Governance, Competetion, The new International Financial Architecture and Large Corporations in Emerging Markets," MPRA Paper 24305, University Library of Munich, Germany.
  20. Thorsten Beck & Ross Levine, 2003. "Legal Institutions and Financial Development," NBER Working Papers 10126, National Bureau of Economic Research, Inc.
  21. Beck, Thorsten & Demirguc-Kunt, Asli & Levine, Ross, 2002. "Law and finance : why does legal origin matter?," Policy Research Working Paper Series 2904, The World Bank.
  22. Mathias Siems, 2007. "Shareholder Protection around the World ("Leximetric II")," ESRC Centre for Business Research - Working Papers wp359, ESRC Centre for Business Research.
  23. Stijn Claessens & Luc Laeven, 2003. "Financial Development, Property Rights, and Growth," Journal of Finance, American Finance Association, vol. 58(6), pages 2401-2436, December.
  24. Sarkar, Prabirjit, 2007. "Stock Market Development and Capital Accumulation: Does Law Matter? A Case Study of India," MPRA Paper 5052, University Library of Munich, Germany.
  25. Ross Levine, 1997. "Financial Development and Economic Growth: Views and Agenda," Journal of Economic Literature, American Economic Association, vol. 35(2), pages 688-726, June.
  26. Rafael La Porta & Florencio Lopez-de-Silane & Andrei Shleifer & Robert W. Vishny, 1997. "Legal Determinants of External Finance," NBER Working Papers 5879, National Bureau of Economic Research, Inc.
  27. Erik Berglof & Ernst-Ludwig von Thadden, 1999. "The Changing Corporate Governance Paradigm: Implications for Transition and Developing Countries," William Davidson Institute Working Papers Series 263, William Davidson Institute at the University of Michigan.
  28. Priya P. Lele & Mathias M. Siems, 2007. "Diversity in Shareholder Protection in Common Law Countries," CESifo DICE Report, Ifo Institute - Leibniz Institute for Economic Research at the University of Munich, vol. 5(1), pages 3-9, 05.
  29. Thorsten Beck & Asli Demirguc-Kunt & Ross Levine, 2002. "Law, Endowment, and Finance," NBER Working Papers 9089, National Bureau of Economic Research, Inc.
  30. Simon Deakin & Priya Lele & Mathias Siems, 2007. "The Evolution of Labour Law: Calibrating and Comparing Regulatory Regimes," ESRC Centre for Business Research - Working Papers wp352, ESRC Centre for Business Research.
  31. Beck, Thorsten & Demirguc-Kunt, Asli & Levine, Ross, 1999. "A new database on financial development and structure," Policy Research Working Paper Series 2146, The World Bank.
  32. Cheffins, Brian R, 2001. "Does Law Matter? The Separation of Ownership and Control in the United Kingdom," The Journal of Legal Studies, University of Chicago Press, vol. 30(2), pages 459-84, Part I Ju.
  33. Mathias M. Siems, 2006. "Shareholder Protection Across Countries – Is the EU on the Right Track?," CESifo DICE Report, Ifo Institute - Leibniz Institute for Economic Research at the University of Munich, vol. 4(3), pages 39-43, October.
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:wef:wpaper:0041. 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: (Tim Byne)

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.