Investor Protections and Their Impact on Capital Markets
Investor protections and their impact on capital markets, 2010. Handbook on Emerging Issues in Corporate Governance, ED. Tourani-Rad, Publisher - Ingley
24 Pages Posted: 28 Aug 2014
Date Written: March 18, 2009
In this survey article, we summarize the evidence from the extant literature on how sovereign laws and their enforcement impact outside investor protection, and the development of capital markets and individual firms. The body of evidence indicates the legal protections conferred on outside shareholders do affect the availability and cost of equity financing, as well as the size and efficiency of stock markets around the world. And both preemptive and remedial rights conferred on outside shareholders are shown to be significantly associated with the size of stock markets and control premiums. However, in so far as it relates to deterring expropriation, the relativee importance of preemptive and remedial rights remain unclear.
Keywords: Investor protection laws, preemptive rights, remedial rights
JEL Classification: K4
Suggested Citation: Suggested Citation