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Diversity in Shareholder Protection in Common Law Countries


Priya Lele


Ashurst LLP; University of Cambridge - Centre for Business Research (CBR)

Mathias M. Siems


Durham University - Durham Law School; University of Cambridge - Centre for Business Research


Journal for Institutional Comparisons, Vol. 5, No. 1, pp. 3-9, 2007

Abstract:     
Previous research often emphasised the similarity of shareholder protection in common law (or English legal origin) countries. Conversely, this article found a remarkable diversity of shareholder protection in common law countries. Using our new shareholder protection index with 60 variables, we presented some graphical representations to highlight and discuss diversity across the UK, the US and India. Our study finds that the UK, the US and India do not only differ in the modes by which law on shareholder protection has changed over time but also in the mechanisms by which they protect shareholders or the areas of emphasis. For instance, we find that of the three countries, the Indian law on shareholder protection has changed the least due to judge-made law and contains the maximum number of provisions relating to public control or mandatory law as a mechanism for protecting shareholders. The UK law in relation to voting powers has improved over the concerned period with increased empowerment of the general meeting. With respect to the laws dealing with listed company variables, we find that in the UK the law improved steadily since the 1990s and in the US it particularly leaped in 2002. The laws in India in this regard really started developing only after the late 1980s and early 1990s with major improvements around 2001. Thus our study shows that even amongst three undoubtedly English legal origin countries the laws vary so much that their classification into one single group according to their legal origins seems almost naïve. This also casts a doubt on the claim that a particular legal origin matters for the quality of law which in turn affects corporate growth and economic development.

This paper is part of a wider research project. The related papers can be downloaded at http://ssrn.com/abstract=897479 and http://ssrn.com/abstract=940567.

Number of Pages in PDF File: 7

Keywords: Shareholder protection, leximetrics, numerical comparative law, law and finance, La Porta et al., LLSV, comparative company law, comparative corporate law, comparative corporate governance, legal origins, convergence, India

JEL Classification: G30, G38, K22, N20, N40, N50

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Date posted: May 25, 2007 ; Last revised: January 30, 2014

Suggested Citation

Lele, Priya and Siems, Mathias M., Diversity in Shareholder Protection in Common Law Countries. Journal for Institutional Comparisons, Vol. 5, No. 1, pp. 3-9, 2007 . Available at SSRN: http://ssrn.com/abstract=988409

Contact Information

Priya P. Lele (Contact Author)
Ashurst LLP ( email )
Broadwalk House
5 Appold Street
London, EC2A 2HA
Great Britain
University of Cambridge - Centre for Business Research (CBR) ( email )
Judge Business School Building - Top Floor
Trumpington Street
Cambridge CB2 1AG
United Kingdom
01223 765325 (Phone)
Mathias M. Siems
Durham University - Durham Law School ( email )
50 North Bailey
Durham, County Durham DH1 3ET
United Kingdom
HOME PAGE: http://www.dur.ac.uk/mathias.siems
University of Cambridge - Centre for Business Research ( email )
Top Floor, Judge Business School Building
Trumpington Street
Cambridge, CB2 1AG
United Kingdom
HOME PAGE: http://www.cbr.cam.ac.uk/people/siems.htm
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