Evolution of Corporate Law and the Transplant Effect: Lessons from Six Countries

Pistor, Katharina; Keinan, Yoram; Kleinheisterkamp, Jan; West, Mark D.

doi:10.1093/wbro/lkg003

“…Our findings complement and extend those of Berkowitz et al (2003a), who argue that what matters for the performance of transplanted institutions is their degree of adaptation to local legal norms and pre-existing formal and informal institutions, rather than the legal family to which they belong (see also Guinnane, 1994;Berkowitz et al, 2003b;Pistor et al, 2003). While Berkowitz et al (2003a) rely on and institutions are as follows: it is difficult for identical institutions to arise endogenously from different cultural milieus (Tabellini and Greif, 2010); the same institution may display different degrees of effectiveness when applied to different environments because of the institutional, rather than the cultural, background of such environments (Ma, 2013); and culture itself may be influenced by institutional arrangements, implying an obvious endogeneity issue (Aldashev et al, 2012).…”

Section: Introductionsupporting

confidence: 82%

Resistance to Institutions and Cultural Distance: Brigandage in Post-Unification Italy

Lecce

¹

,

Ogliari

²

,

Orlando

³

2017

SSRN Journal

1

0

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We study how cultural distance affects the rejection of imposed institutions. To this purpose, we exploit the transplantation of Piedmontese institutions on Southern Italy which occurred during the Italian unification. We assemble a novel and unique dataset containing information on episodes of brigandage, a form of violent uprising against the unitary government, at the municipal level. We use geographic distance from local settlements of Piedmontese descent as a proxy for cultural distance between each municipality and the new rulers. We find robust evidence that cultural distance from the origins of the transplanted institutions is significantly associated with more intense resistance to these institutions. Our results further suggest that the rejection of the transplanted institutions may have a long lasting effect on political participation.

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“…Our findings complement and extend those of Berkowitz et al (2003a), who argue that what matters for the performance of transplanted institutions is their degree of adaptation to local legal norms and pre-existing formal and informal institutions, rather than the legal family to which they belong (see also Guinnane, 1994;Berkowitz et al, 2003b;Pistor et al, 2003). While Berkowitz et al (2003a) rely on 4 See Acemoglu et al, 2005 andGuiso et al, 2006 for general introductions.…”

Section: Introductionsupporting

confidence: 70%

Resistance to Institutions and Cultural Distance: Brigandage in Post-Unification Italy

Lecce

¹

,

Ogliari

²

,

Orlando

³

2017

SSRN Journal

2

0

View full text Add to dashboard Cite

We study how cultural distance affects the rejection of imposed institutions. To this purpose, we exploit the transplantation of Piedmontese institutions on Southern Italy which occurred during the Italian unification. We assemble a novel and unique dataset containing information on episodes of brigandage, a form of violent uprising against the unitary government, at the municipal level. We use geographic distance from local settlements of Piedmontese descent as a proxy for cultural distance between each municipality and the new rulers. We find robust evidence that cultural distance from the origins of the transplanted institutions is significantly associated with more intense resistance to these institutions. Our results further suggest that the rejection of the transplanted institutions may have a long lasting effect on political participation.

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“…Source : Brehm, Macht (2005: 175 -177 and Appendix 1) Relatively high degree of compliance with the Core Principles does not necessarily mean that they are enforced. As is demonstrated by the experience of many transitions and developing countries for the regulatory reform to succeed the new structure of incentives must be enforceable and enforced (Pistor et al 2003, World Bank 2003. The CBRC is making progress in enforcement of new regulations (see Exhibit 2), although given this size, scope and complexity of the sector, cases and corrective actions affect only the tip of an iceberg (Chow 2006 Numerous reports point out two key challenges to better enforcement of the new rules.…”

Section: Regulatory Reforms In Banking Sectormentioning

confidence: 99%

Banking Reform in China: Driven by International Standards and Chinese Specifics

Kudrna¹

2007

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Abstract:This paper reviews the progress of banking reforms in China over the last five years. The stated goal of reform is to "transform major banks into internationally competitive joint-stock commercial banks with appropriate corporate governance structures, adequate capital, stringent internal controls, safe and sound business operations, quality services as well as desirable profitability." The reform strategy relies on three pillars -extensive publicly-financed bailouts, implementation of the international best practices in bank governance and regulation and listing of major banks at the Hong Kong stock exchange. This strategy has been successful in stabilizing the three major banks. However, our review of academic and commercial research indicates that there is no evidence that the stabilization is sustainable. Prudential indicators of the largest banks are comparable to international averages, but this is an outcome of large bail outs and ongoing credit boom rather than fundamental change in banker's incentives. Reforms of bank governance and regulatory framework need more time to proliferate throughout the banking and regulatory hierarchies. However, time alone would not solve the problem as the reform design retains important departures from international standards. These standards are implemented in a selective manner; those aspects that help to concentrate key powers in the center are implemented rather vigorously, whereas principles that require independence of banks' boards and regulators are ignored. Thus the largest Chinese banks remain under the firm state control and can be used as development policy tools for the better or the worse.

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Evolution of Corporate Law and the Transplant Effect: Lessons from Six Countries

Cited by 36 publications

References 29 publications

Resistance to Institutions and Cultural Distance: Brigandage in Post-Unification Italy

Resistance to Institutions and Cultural Distance: Brigandage in Post-Unification Italy

Resistance to Institutions and Cultural Distance: Brigandage in Post-Unification Italy

Banking Reform in China: Driven by International Standards and Chinese Specifics

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