Law and Finance
1998/12/01 by Rafael La Porta, Florencio Lopez‐de‐Silanes, Florencio López‐de‐Silanes +3 · 83 citations
Business, Management and Accounting · Economics, Econometrics and Finance · #Corporate Finance and Governance #Banking stability, regulation, efficiency #Corporate Insolvency and Governance
paper · doi:10.1086/250042
Abstract
This paper examines legal rules covering protection of corporate shareholders and creditors, the origin of these rules, and the quality of their enforcement in 49 countries. The results show that common‐law countries generally have the strongest, and frenchcivillaw countries the weakest, legal protections of investors, with German‐and scandinavin‐civil‐law countries located in the middle. We also find that concentration of ownership of shares in the largest public companies is negativelyrelated to investor protections, consistent with the hypothesis that small, diversified share‐holders are unlikely to be important in countries that fail to protect their rights.
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