What Does Not Work in Comparing Securities Laws: A Critique on La Porta et al.'s Methodology

International Company and Commercial Law Review, pp. 300-305, 2005

CPC-RPS No. 0009

11 Pages Posted: 6 Apr 2005 Last revised: 2 Apr 2009

Mathias M. Siems

Durham University - Durham Law School; University of Cambridge - Centre for Business Research

Date Written: September 20, 2008

Abstract

The articles by La Porta et al. are some of the most-cited pieces in economics, finance, and law. This is also true for their recent article "What Works in Securities Laws?". In this study they examine the effect of securities laws on stock market developments in 49 countries. Based on various indices their main finding is that there is little evidence that public enforcement is important, but strong evidence that laws mandating disclosure and facilitating private enforcement through liability rules benefit stock markets. In this short paper, I do not question this result as such nor do I object to their economic findings. Rather this paper will discuss whether La Porta et al.'s methodology on comparative law, which is often taken for granted in Law and Finance, is accurate.

Keywords: Comparative law, securities law, law and finance, La Porta, Lopez-de-Silanes, Shleifer, numerical comparative law, econometrics, what works in securities laws

JEL Classification: K22, G15, G18, G3, G38, N40, P5, C00, B23

Suggested Citation

Siems, Mathias M., What Does Not Work in Comparing Securities Laws: A Critique on La Porta et al.'s Methodology (September 20, 2008). International Company and Commercial Law Review, pp. 300-305, 2005; CPC-RPS No. 0009. Available at SSRN: https://ssrn.com/abstract=608644

Mathias M. Siems (Contact Author)

Durham University - Durham Law School ( email )

Stockton Road
Durham, County Durham DH1 3LE
United Kingdom

HOME PAGE: http://www.dur.ac.uk/mathias.siems

University of Cambridge - Centre for Business Research ( email )

Top Floor, Judge Business School Building
Trumpington Street
Cambridge, CB2 1AG
United Kingdom

HOME PAGE: http://www.cbr.cam.ac.uk/people/research-associates/mathias-m-siems/

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