Shareholder Protection Around the World ('Leximetric II')

Abstract:     
This article analyzes how shareholder protection has developed in 20 countries from 1995 to 2005. In contrast to traditional legal research, it draws on a quantitative methodology to law ('leximetrics', 'numerical comparative law'). Some of its results are that in most countries shareholder protection has improved in the last years; that developed countries perform better than developing countries in protecting shareholders; that shareholder protection in common law countries is relatively similar whereas there is no comparable similarity within the German and French civil law families; that German corporate law is 'more mainstream' and US corporate law is 'more eccentric' than the law of the other countries; and that in general there has been convergence in the last decade. In order to explain these results, the distinction between origin and transplant countries can be useful. However, in contrast to previous studies, this does not mean that all depends on the distinction between English, French and German origin and transplant countries. Rather it is decisive (a) which 'version' of the corporate law the transplant country copied, (b) whether transplant countries continue to take developments in the origin countries into account and (c) whether transplant countries have left the path of their (former) origin countries.

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, legal families, legal transplants, legal development, convergence, civil law, common law

JEL Classifications: G00, G30, G38, K00, K22, N20, N40, P50

Working Paper Series