Culture, Law, and Finance: Cultural Dimensions of Corporate Governance Laws

62 Pages Posted: 27 Apr 2001

See all articles by Amir N. Licht

Amir N. Licht

Interdisciplinary Center (IDC) Herzliyah - Radzyner School of Law; European Corporate Governance Institute (ECGI)

Chanan Goldschmidt

Interdisciplinary Center (IDC) Herzliyah - Radzyner School of Law

Shalom H. Schwartz

Hebrew University of Jerusalem - Department of Psychology; National Research University Higher School of Economics

Multiple version iconThere are 2 versions of this paper

Date Written: May 2001

Abstract

Using cross-sectional samples of nations from around the world and drawing on two models of cultural dimensions in cross-cultural psychology, we study the relations between investors' legal rights - as reflected in the indices of La Porta et al. (LLSV) - and national cultural profiles. We find that grouping countries according to legal families - the cornerstone of LLSV's legal approach - provides only a partial depiction of the universe of corporate governance regimes. Our findings cast doubt on the alleged supremacy of statutes in common law countries in protecting creditors and, hence, in protecting investors in general. We also find that indices of voting rights and creditor rights correlate with cultural dimensions, but that an index of remedial rights does not. These findings have implications for studying diversity and convergence in corporate governance systems and for a systematic analysis of the interface between law and culture.

JEL Classification: G34, K22, Z13

Suggested Citation

Licht, Amir N. and Goldschmidt, Chanan and Schwartz, Shalom H., Culture, Law, and Finance: Cultural Dimensions of Corporate Governance Laws (May 2001). Available at SSRN: https://ssrn.com/abstract=267190 or http://dx.doi.org/10.2139/ssrn.267190

Amir N. Licht (Contact Author)

Interdisciplinary Center (IDC) Herzliyah - Radzyner School of Law ( email )

P.O. Box 167
Herzliya, 46150
Israel
972-9-952-7332 (Phone)
952-9-9513323 (Fax)

European Corporate Governance Institute (ECGI)

c/o the Royal Academies of Belgium
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952-9-9513323 (Fax)

HOME PAGE: http:/www.ecgi.org

Chanan Goldschmidt

Interdisciplinary Center (IDC) Herzliyah - Radzyner School of Law ( email )

P.O. Box 167
Herzliya, 46150
Israel

Shalom H. Schwartz

Hebrew University of Jerusalem - Department of Psychology ( email )

National Research University Higher School of Economics ( email )

Myasnitskaya street, 20
Moscow, Moscow 119017
Russia

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