Posted: 26 Nov 1998
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 French-civil-law countries the weakest, legal protections of investors, with German- and Scandinavian-civil-law countries located in the middle. We also find that concentration of ownership of shares in the largest public companies is negatively related to investor protections, consistent with the hypothesis that small, diversified shareholders are unlikely to be important in countries that fail to protect their rights.
JEL Classification: G38, G32, K11, K12, K22
Suggested Citation: Suggested Citation
La Porta, Rafael and Lopez de Silanes, Florencio and Shleifer, Andrei and Vishny, Robert W., Law and Finance. Journal of Political Economy, Vol. 106, No. 6, December 1998. Available at SSRN: https://ssrn.com/abstract=139134