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Law and Finance

Author

Listed:
  • Rafael LaPorta
  • Florencio Lopez de-Silanes
  • Andrei Shleifer
  • Robert W. Vishny

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 french civil law countries the weakest, legal protections of investors, with German†-and Scandinavian†-civil†law countries located in the middle. We also find that concentration of ownership of shares in the largest public companies is negatively related 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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Suggested Citation

  • Rafael LaPorta & Florencio Lopez de-Silanes & Andrei Shleifer & Robert W. Vishny, 1996. "Law and Finance," Harvard Institute of Economic Research Working Papers 1768, Harvard - Institute of Economic Research.
    • Handle: RePEc:fth:harver:1768
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    References listed on IDEAS

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