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

See all articles by Manu Gupta

Manu Gupta

Virginia Commonwealth University (VCU) - Department of Finance, Insurance & Real Estate

Oghenovo A. Obrimah

FISK University

Nanda K. Rangan

Virginia Commonwealth University

Puneet Prakash

Missouri State University

Date Written: March 18, 2009

Abstract

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

Gupta, Manu and Obrimah, Oghenovo A. and Rangan, Nanda K. and Prakash, Puneet, Investor Protections and Their Impact on Capital Markets (March 18, 2009). Investor protections and their impact on capital markets, 2010. Handbook on Emerging Issues in Corporate Governance, ED. Tourani-Rad, Publisher - Ingley, Available at SSRN: https://ssrn.com/abstract=2486745

Manu Gupta

Virginia Commonwealth University (VCU) - Department of Finance, Insurance & Real Estate ( email )

Richmond, VA 23284
United States

Oghenovo A. Obrimah (Contact Author)

FISK University ( email )

1000 17th Ave N
Nashville, TN TN 37208-3051
United States
4049404990 (Phone)

Nanda K. Rangan

Virginia Commonwealth University ( email )

2400 East Cary Street, Suite # 400
Richmond, VA 23223
United States
8048277410 (Phone)

Puneet Prakash

Missouri State University ( email )

United States
65897 (Fax)

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