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The legal theory of finance: Implications for methodology and empirical research

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  • Deakin, Simon

Abstract

This commentary on the LTF project highlights the importance of the idea that law ‘constructs’ finance and considers some of its methodological implications. The idea that law shapes finance implies that the legal system can be clearly differentiated in theoretical terms from the economy, and that the independent causal influence of the law on financial outcomes can be measured empirically. It will be argued that this can best be achieved by placing empirical research on law and finance in an evolutionary-theoretical perspective, which draws on related developments in game theory and systems theory, in the statistical study of law (‘leximetrics’), and in time-series econometrics.

Suggested Citation

  • Deakin, Simon, 2013. "The legal theory of finance: Implications for methodology and empirical research," Journal of Comparative Economics, Elsevier, vol. 41(2), pages 338-342.
    • Handle: RePEc:eee:jcecon:v:41:y:2013:i:2:p:338-342
    DOI: 10.1016/j.jce.2013.03.005
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    References listed on IDEAS

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    1. Deakin, S., 2011. "Legal Evolution: Integrating Economic and Systemic Approaches," Working Papers wp424, Centre for Business Research, University of Cambridge.
    2. David Howarth, 2013. "Law as Engineering," Books, Edward Elgar Publishing, number 14432.
    3. Deakin Simon, 2011. "Legal Evolution: Integrating Economic and Systemic Approaches," Review of Law & Economics, De Gruyter, vol. 7(3), pages 659-683, December.
    4. Aoki, Masahiko, 2010. "Corporations in Evolving Diversity: Cognition, Governance, and Institutions," OUP Catalogue, Oxford University Press, number 9780199218530.
    5. Mathias Siems & Simon Deakin, 2010. "Comparative Law and Finance: Past, Present, and Future Research," Journal of Institutional and Theoretical Economics (JITE), Mohr Siebeck, Tübingen, vol. 166(1), pages 120-140, March.
    6. Kevin D. Hoover & Soren Johansen & Katarina Juselius, 2008. "Allowing the Data to Speak Freely: The Macroeconometrics of the Cointegrated Vector Autoregression," American Economic Review, American Economic Association, vol. 98(2), pages 251-255, May.
    7. Deakin, Simon & Sarkar, Prabirjit & Singh, Ajit, 2011. "An end to consensus? the selective impact of corporate law reform on financial development," MPRA Paper 39047, University Library of Munich, Germany.
    8. Pistor, Katharina, 2013. "A legal theory of finance," Journal of Comparative Economics, Elsevier, vol. 41(2), pages 315-330.
    9. Katarina Juselius, 2011. "Time to reject the privileging of economic theory over empirical evidence? A reply to Lawson," Cambridge Journal of Economics, Cambridge Political Economy Society, vol. 35(2), pages 423-436.
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    Cited by:

    1. Pistor Katharina, 2021. "Theorizing Beyond “The Code of Capital”: A Reply," Accounting, Economics, and Law: A Convivium, De Gruyter, vol. 11(1), pages 65-80, March.
    2. Li, Taoying & Peng, Mengyin & Zhang, Jianjiang & Zheng, Long & Chen, Qiang, 2024. "Legal environment and natural resource dependence: The role of fintech and green innovation in China," Resources Policy, Elsevier, vol. 90(C).

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    More about this item

    Keywords

    Law and finance; Law and economics; Leximetrics; Time-series econometrics;
    All these keywords.

    JEL classification:

    • A12 - General Economics and Teaching - - General Economics - - - Relation of Economics to Other Disciplines
    • C22 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Time-Series Models; Dynamic Quantile Regressions; Dynamic Treatment Effect Models; Diffusion Processes
    • G18 - Financial Economics - - General Financial Markets - - - Government Policy and Regulation
    • K22 - Law and Economics - - Regulation and Business Law - - - Business and Securities Law

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