Abstract

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 enforcement, have smaller and narrower capital markets. These findings apply to both equity and debt markets. In particular, French civil law countries have both the weakest investor protections and the least developed capital markets, especially as compared to common law countries.

Keywords

Capital marketEquity (law)DebtEnforcementBusinessSample (material)Investor protectionEmerging marketsQuality (philosophy)Financial systemEconomicsFinanceLawCorporate governancePolitical science

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Publication Info

Year
1997
Type
article
Volume
52
Issue
3
Pages
1131-1150
Citations
9801
Access
Closed

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Cite This

Rafael La Porta, Florencio López‐de‐Silanes, Andrei Shleifer et al. (1997). Legal Determinants of External Finance. The Journal of Finance , 52 (3) , 1131-1150. https://doi.org/10.1111/j.1540-6261.1997.tb02727.x

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DOI
10.1111/j.1540-6261.1997.tb02727.x