Abstract

http://ssrn.com/abstract=209312
 
 

References (22)



 
 

Citations (52)



 
 

Footnotes (7)



 


 



Law and Equity Markets: A Simple Model


Davide Lombardo


European University Institute

Marco Pagano


University of Naples Federico II - Department of Economics and Statistics; Einaudi Institute for Economics and Finance (EIEF); Centre for Economic Policy Research (CEPR); European Corporate Governance Institute (ECGI)

October 1999

Stanford Law and Economics Olin Working Paper No. 194; and University of Salerno Working Paper No. 25

Abstract:     
We analyze how the law and its enforcement affect equity market equilibrium. Improvements in the legal system, while invariably associated with broader equity markets, have different effects on equity returns depending on the institutional change considered and on the degree of international stock market segmentation. The model is useful to interpret the results of recent empirical work, such as La Porta et al. (1997) and Lombardo and Pagano (1999). In particular, it can rationalize the observed cross-country pattern, whereby better institutions are associated both with broader equity markets and higher risk-adjusted returns on equity.

Number of Pages in PDF File: 28

JEL Classification: G12, K22, K42

working papers series


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Date posted: February 29, 2000  

Suggested Citation

Lombardo, Davide and Pagano, Marco, Law and Equity Markets: A Simple Model (October 1999). Stanford Law and Economics Olin Working Paper No. 194; and University of Salerno Working Paper No. 25. Available at SSRN: http://ssrn.com/abstract=209312 or http://dx.doi.org/10.2139/ssrn.209312

Contact Information

Davide Lombardo
European University Institute ( email )
Badia Fiesolana
Via dei Roccettini 9
I-50016 San Domenico Fiesole, 50014
Italy
Marco Pagano (Contact Author)
University of Naples Federico II - Department of Economics and Statistics ( email )
Via Cintia - Monte S. Angelo
Napoli, 80126
Italy
+39 081 675306 (Phone)
+39 081 7663540 (Fax)
Einaudi Institute for Economics and Finance (EIEF)
Via Sallustiana, 62
Rome, 00187
Italy
Centre for Economic Policy Research (CEPR)
77 Bastwick Street
London, EC1V 3PZ
United Kingdom
European Corporate Governance Institute (ECGI)
c/o ECARES ULB CP 114
B-1050 Brussels
Belgium
HOME PAGE: http:/www.ecgi.org
Feedback to SSRN


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References:  22
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