Country Legal Environments and Corporate Investment Performance

40 Pages Posted: 20 May 2012 Last revised: 13 Mar 2015

See all articles by Dennis C. Mueller

Dennis C. Mueller

University of Vienna - Center for Business Studies - Department of Economics

B. Burcin Yurtoglu

WHU - Otto Beisheim School of Management

Date Written: May 16, 2000

Abstract

In recent years considerable attention has been devoted to differences across countries in the institutional environments in which corporations operate, and the consequences of these institutional differences for corporate performance. In this paper we test for the presence of differences in corporate performance across 38 countries, and in particular whether these differences are related to the types of legal systems existing in each country. To measure corporate performance we estimate returns on investment relative to company costs of capital in each country. We find significant differences in the investment performance of corporations across our sample of countries. Companies in countries with English-origin, common law legal systems perform significantly better on average than do those in civil law systems.

Keywords: investment returns, international comparison, legal systems

JEL Classification: G34, L21

Suggested Citation

Mueller, Dennis C. and Yurtoglu, B. Burcin, Country Legal Environments and Corporate Investment Performance (May 16, 2000). German Economic Review, Vol. 1, No. 2, pp. 187-220, 2000. Available at SSRN: https://ssrn.com/abstract=2061241

Dennis C. Mueller

University of Vienna - Center for Business Studies - Department of Economics ( email )

BWZ - BrĂ¼nner Str.
A-1010 Vienna
Austria
+43 1 4277 37484 (Phone)
+43 1 4277 37498 (Fax)

HOME PAGE: http://mailbox.univie.ac.at/~muelled2/

B. Burcin Yurtoglu (Contact Author)

WHU - Otto Beisheim School of Management ( email )

Chair of Corporate Finance
Burgplatz 2
Vallendar, 56179
Germany
+49 261 6509-721 (Phone)
+49 261 6509-729 (Fax)

HOME PAGE: http://www.whu.edu/forschung/fakultaet/finance-group/corporate-finance/

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