Law and Finance: Why Does Legal Origin Matter?, Issue 9379New research suggests that cross-country differences in legal origin help explain differences in financial development. This paper empirically assesses two theories of why legal origin influences financial development. First, the political' channel stresses that (i) legal traditions differ in the priority they give to the rights of individual investors vis- ...-vis the state and (ii) this has repercussions for the development of property rights and financial markets. Second, the adaptability' channel holds that (i) legal traditions differ in their ability to adjust to changing commercial circumstances and (ii) legal systems that adapt quickly to minimize the gap between the contracting needs of the economy and the legal system's capabilities will foster financial development more effectively than would more rigid legal traditions. We use historical comparisons and cross-country regressions to assess the validity of these two channels. We find that legal origin matters for financial development because legal traditions differ in their ability to adapt efficiently to evolving economic conditions. |
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... Levine. the validity of the instruments . Nevertheless , we have confirmed all of the results in the paper using a smaller sample of countries that eliminates the eleven countries listed above . To assess the political and adaptability ...
... Levine. the validity of the instruments . Nevertheless , we have confirmed all of the results in the paper using a smaller sample of countries that eliminates the eleven countries listed above . To assess the political and adaptability ...
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... Levine. References Acemoglu , Daron , Johnson , Simon , and Robinson , James A. , " The Colonial Origins of ... Levine , Ross , " Law , Endowments , and Finance . " Journal of Financial Economics , forthcoming , 2003 . Beck , Thorsten ...
... Levine. References Acemoglu , Daron , Johnson , Simon , and Robinson , James A. , " The Colonial Origins of ... Levine , Ross , " Law , Endowments , and Finance . " Journal of Financial Economics , forthcoming , 2003 . Beck , Thorsten ...
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... Levine. Journal of Political Economy 106 , 1113-1155 , 1998 . Levine , Ross , “ Financial Development and Economic Growth : Views and Agenda . ” Journal of Economic Literature 35 , 688-726 , 1997 . Levine , Ross , " The Legal Environment ...
... Levine. Journal of Political Economy 106 , 1113-1155 , 1998 . Levine , Ross , “ Financial Development and Economic Growth : Views and Agenda . ” Journal of Economic Literature 35 , 688-726 , 1997 . Levine , Ross , " The Legal Environment ...
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Acemoglu adaptability channel adaptability indicators Beck British common law British legal origin channel stresses civil law countries common law countries correlated Daron Acemoglu Dawson Demirguc-Kunt differences in financial dummy variable Economic efficiently exogenous component explain cross-country differences explain financial development F-test financial intermediaries financial markets Financial Sector Development France French civil law French law French legal origin German civil law German legal origin instrumental variables Journal judiciary jurisprudence Justinian Law and Finance Legal Adaptability legal origin countries legal origin dummy legal origin explains legal origin matters legal system adaptability legal traditions differ Levine LLSV Lopez-de-Silanes Merryman Napoleonic doctrine NBER OIR test origin explain financial Panel paper political and adaptability Political Indicator Political Structure Porta Private Credit private property rights protect private property Roman law share of GDP Shleifer significantly statutory law Stock Market Development subscription Supreme Court Judges Supreme Court Power Tenure of Supreme test Case Law variable that takes