Shareholder Protection Across Countries – Is the EU on the Right Track?

Anlegerschutz, EU-Recht, EU-Staaten, Investor protection, Community law, EU countries

Shareholder Protection around the World ("Leximetric II")

This article analyzes how shareholder protection has developed in 20 countries from 1995 to 2005. In contrast to traditional legal research, it draws on a quanti-tative methodology to law ("leximetrics", "numerical comparative law"). Some of its results are that in most countries shareholder protection has improved in the last years; that developed countries perform better than developing countries in protecting shareholders; that shareholder protection in common law countries is relatively similar whereas there is no comparable similarity within the Ger-man and French civil law families; that German corporate law is "more main-stream" and US corporate law is "more eccentric" than the law of the other countries; and that in general there has been convergence in the last decade. In order to explain these results, the distinction between origin and transplant countries can be useful. However, in contrast to previous studies, this does not mean that all depends on the distinction between English, French and German origin and transplant countries. Rather it is decisive (a) which "version" of the corporate law the transplant country copied, (b) whether transplant countries continue to take developments in the origin countries into account and (c) whether transplant countries have left the path of their (former) origin countries.Shareholder protection, leximetrics, numerical comparative law, law and fi-nance, La Porta et al., LLSV, comparative company law, comparative corporate law, comparative corporate governance, legal origins, legal families, legal transplants, legal development, convergence, civil law, common law.

Legal origins: reconciling law and finance and comparative law

In the last few years law and finance scholars have 'discovered' the usefulness of comparative law. Their studies look at the quantifiable effect that legal rules and their enforcement have on financial development in different countries. Moreover, they link their results with the long- standing distinction between Civil Law and Common Law countries. Whether this revival of 'legal families' is a useful way forward is, however, a matter of debate. The following article challenges these studies and looks for characteristic features which are more precise and meaningful than the use of legal families as such.legal origins, legal families, legal traditions, numerical comparative law, law and finance, law and development, Civil Law, Common Law

The End of Comparative Law

Following the 1900 congress in Paris, the beginning of the 20th century saw comparative law emerge as a significant discipline. This paper suggests that the early 21st century is seeing the decline, or maybe even the 'end', of comparative law. In contrast to other claims which see the 21st century as the 'era of comparative law', there are at least four trends which give rise to pessimism: 'the disregard', 'the complexity', 'the simplicity', and 'the irrelevance' of comparative law. These phenomena will be explained in the body of this paper; the concluding part considers suggestions as to how to proceed further.Comparative law, numerical comparative law, legal culture, law and finance, World Bank, harmonisation, convergence, governance.

Diversity in Shareholder Protection in Common Law Countries

Aktionär, Anlegerschutz, Common Law, Shareholders, Investor protection

Shareholder Protection: A Leximetric Approach

In this paper we build a new and meaningful shareholder protection index for five countries and code the development of the law for over three decades. At-tributing and comparing legal differences by numbers is contrary to the tradi-tional way of doing comparative law and the use of a quantitative methodology to account for variations across legal systems has been subjected to some searching criticisms. However, we believe that with a cautious approach, it has the potential to open new vistas of research in the area of comparative law and as such should not be shunned. This paper provides an illustration of the inter-esting possibilities that diligent quantification of legal rules ('leximetrics') pro-vides for comparing variations across time series and across legal systems. For instance, our study finds, that in all of our panel countries shareholder protec-tion has been improving in the last three decades; that the protection of minority against majority shareholders is considerably stronger in 'blockholder countries' as compared to the non-blockholder countries and that convergence in share-holder protection is taking place since 1993 and is increasing since 2001. Fi-nally, our examination of the legal differences between the five countries does not confirm the distinction between common law and civil law countries.Shareholder protection, leximetrics, numerical comparative law, law and fi-nance, La Porta et al., LLSV, coding, comparative company law, comparative corporate law, comparative corporate governance, legal origins, legal development, convergence

Shareholder Protection and Stock Market Development: An Empirical Test of the Legal Origins Hypothesis

We test the 'law matters' and 'legal origin' claims using a newly created panel dataset meas-uring legal change over time in a sample of developed and developing countries. Our dataset improves on previous ones by avoiding country-specific variables in favour of functional and generic descriptors, by taking into account a wider range of legal data, and by considering the effects of weighting variables in different ways, thereby ensuring greater consistency of cod-ing. Our analysis shows that legal origin explains part of the pattern of change in the adop-tion of shareholder protection measures over the period from the mid-1990s to the present day: in both developed and developing countries, common law systems were more protective of shareholder interests than civil law ones. We explain this the result on the basis of the head start common law systems had in adjusting to an emerging 'global' standard based mainly on Anglo-American practice. Our analysis also shows, however, that civil law origin was not much of an obstacle to convergence around this model, since civilian systems were catching up with their counterparts in the common law. We then investigate whether there was a link in this period between increased shareholder protection and stock market devel-opment, using a number of measures such as stock market capitalisation, the value of stock-trading and the number of listed firms, after controlling for legal origin, the state of economic development of particular countries, and their position on the World Bank rule of law index. We find no evidence of a long-run impact of legal change on stock market development. This finding is incompatible with the claim that legal origin affects the efficiency of legal rules and ultimately economic development. Possible explanations for our result are that laws have been overly protective of shareholders; transplanted laws have not worked as ex-pected; and, more generally, the exogenous legal origin effect is not as strong as widely sup-posed.Law and finance, shareholder rights, corporate governance, corporate finance, legal origins, comparative law.