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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... legal origin in explaining cross - country variance in financial development , ( 2 ) the ability of legal origin to ... dummy variable indicates that the British legal origin dummy is significantly different from the French legal origin ...
... legal origin in explaining cross - country variance in financial development , ( 2 ) the ability of legal origin to ... dummy variable indicates that the British legal origin dummy is significantly different from the French legal origin ...
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Why Does Legal Origin Matter? Thorsten Beck, Aslı Demirgüç-Kunt, Ross Levine. French dummy in all regressions except one . In half of the regressions , the German and British legal dummies are not statistically different from each other ...
Why Does Legal Origin Matter? Thorsten Beck, Aslı Demirgüç-Kunt, Ross Levine. French dummy in all regressions except one . In half of the regressions , the German and British legal dummies are not statistically different from each other ...
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Why Does Legal Origin Matter? Thorsten Beck, Aslı Demirgüç-Kunt, Ross Levine ... dummy variables that take on the value one for countries with French civil ... dummy variable that takes value one if Supreme Court Judges have life - long ...
Why Does Legal Origin Matter? Thorsten Beck, Aslı Demirgüç-Kunt, Ross Levine ... dummy variables that take on the value one for countries with French civil ... dummy variable that takes value one if Supreme Court Judges have life - long ...
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Common terms and phrases
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