Law and Finance | RDL Research Database

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.

Keywords

ShareholderCreditorEnforcementBusinessInvestor protectionQuality (philosophy)GermanCommon lawCorporate governanceFinanceAccountingEconomicsLawDebtPolitical science

Affiliated Institutions

Related Publications

Legal Determinants of External Finance

Rafael La Porta , Florencio López‐de‐Silanes , Andrei Shleifer +1 more

ABSTRACT Using a sample of 49 countries, we show that countries with poorer investor protections, measured by both the character of legal rules and the quality of law enforcemen...

1997 The Journal of Finance 9801 citations

Protection of minority interest and the development of security markets

Franco Modigliani , Enrico Perotti

While excessive regulation is an obstacle to the development of financial markets, we argue that lack of basic rules or poorly enforced regulation may explain the relative impor...

1997 Managerial and Decision Economics 120 citations

A Survey of Corporate Governance

Andrei Shleifer , Robert W. Vishny

ABSTRACT This article surveys research on corporate governance, with special attention to the importance of legal protection of investors and of ownership concentration in corpo...

1997 The Journal of Finance 15870 citations

Banks and Corporate Control in Japan

Randall Mørck , Masao Nakamura

Using a large sample of Japanese firm level data, we find that Japanese banks act primarily in the short term interests of creditors when dealing with firms outside bank groups....

1999 The Journal of Finance 596 citations

I Keeping Good Company

Jonathan Charkham

Abstract It matters to all of us that companies should be governed effectively. The prosperity of many associated with the company-whether directly as managers and employers, or...

1994 308 citations

Publication Info

Year: 1998
Type: article
Volume: 106
Issue: 6
Pages: 1113-1155
Citations: 17629
Access: Closed

External Links

View on DOI.org

Social Impact

Altmetric

Law and Finance

PlumX Metrics

Social media, news, blog, policy document mentions

Citation Metrics

17629

OpenAlex

Cite This

APA Style

                            
                                
                                    Rafael La Porta, 
                                
                                    Florencio López‐de‐Silanes, 
                                
                                    Andrei Shleifer
                                
                                et al.
                            
                            (1998). 
                            Law and Finance. 
                            Journal of Political Economy
                            , 106
                            (6)
                            , 1113-1155.
                            https://doi.org/10.1086/250042
                        

Identifiers

DOI: 10.1086/250042