Law and Finance After a Decade of Research

Porta, Rafael La; López-de-Silanes, Florencio; Shleifer, Andrei

doi:10.1016/b978-0-44-453594-8.00006-9

Cited by 86 publications

(43 citation statements)

References 188 publications

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“…By drawing on international CSR literature (Ayuso, Rodríguez, García-Castro, & Ariño, 2014), future researchers can measure home countriesy formal institutions as the legal environments of the home countries of companies. In terms of countries, researchers can identify Anglo-Saxon, French, German and Scandinavian legal traditions (Ayuso et al, 2014;La Porta, Lopez-de-Silanes, & Shleifer, 2013;La Porta, Lopez-de-Silanes, Shleifer, & Vishny, 1998). Considering the varieties of capitalism (Aoki, 1988;Hall & Soskice, 2001), formal institutions are classified into two broad economies: liberal and coordinated market economies.…”

Section: Limitations and Future Researchmentioning

confidence: 99%

Multinationals and sustainable development: Does internationalization develop corporate sustainability of emerging market multinationals?

Park

2018

Bus Strat Env

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Based on theories of attention and institution, this paper examines how the internationalization of emerging market multinationals (EMNEs) affects their corporate sustainability (CS). A contrasting perspective with respect to the dual effects of internationalization on sustainability strengths (being good) and sustainability concerns (being bad) is developed. On one hand, it is argued that internationalization improves CS strengths because EMNEs that rely on foreign sales are motivated to adopt CS as a global business norm. Such norm‐conformity overcomes the liability of origin and legitimacy challenge in foreign markets. On the other hand, it is contended that internationalization also increases CS concerns because subsidiaries of EMNEs are susceptible to being decoupled from the headquarters' CS policy. The results show that internationalization can be both good and bad for CS. Thus, it can be misleading to simply say that there is either a positive or a negative relationship between internationalization and CS.

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Section: Limitations and Future Researchmentioning

confidence: 99%

Multinationals and sustainable development: Does internationalization develop corporate sustainability of emerging market multinationals?

Park

2018

Bus Strat Env

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“…In a series of papers, LLSV confirm that shareholder rights are associated with a nation's financial development and dispersion of ownership. 22 …”

Section: Economic Perspectives On Securities Lawmentioning

confidence: 99%

Protecting Markets from Society

Gershenson

2015

Politics & Society

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The state incentivizes investors to entrust capital to public corporations by granting shareholders enforceable rights over managers. However, these rights create legal "access points" through which social movements can make nonpecuniary claims on the corporation. I use original historical research on the Securities and Exchange Commission's administration of federal securities law to show that concern over nonpecuniary claims motivates the state to enact the role of "market protector." In this role, the commission insulates managers of corporations from shareholders' claims that it deems illegitimate because they are insufficiently profit-oriented. Thus the inverse of Polanyi's observation that society protects itself from markets is also true: the state creates market boundaries so that "always embedded" markets function more like autonomous, profit-oriented markets. Accordingly, the extent to which corporate democracy represents general, social interests or narrow, profitoriented interests is largely a function of political contestation and state policy.

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“…Our findings show that, as predicted by the ‘law and finance’ literature (La Porta et al ., ), ‘good’ macro‐level corporate governance, that is, level of investor protection, is positively associated with firm growth rate. Moreover, investor protection plays a moderating role on the relationship between growth and the internal and external financial resources of a firm, by reducing the sensitivity of investments to internally generated cash flow, as well as affecting the firm growth‐leverage nexus.…”

Section: Introductionmentioning

confidence: 95%

“…An extensive literature compares corporate financial policies in countries characterized by different levels of investor protection (La Porta et al ., ). A high degree of investor protection alleviates both conflicts of interest and informational asymmetries between corporate insiders and external investors and potentially increases firms' ability to raise external capital, and ultimately to finance investments (La Porta et al ., , ; Demirgüç‐Kunt and Maksimovic, ).…”

Section: Introductionmentioning

confidence: 97%

Firm Growth and Legal Environment

2018

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An effective country‐level legal environment is crucial for promoting access to finance, development, and ultimately economic growth. Based on a sample of large companies listed in Continental Europe in the period 2002–2011, this study suggests that investor protection level is related to firm growth. Specifically, investor protection: a) enhances the growth rate of the firm; b) affects growth sensitivity to leverage and cash flow. These results provide empirical support to recommendations by policy makers advocating for increased investor protection in Europe.

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Law and Finance After a Decade of Research

Cited by 86 publications

References 188 publications

Multinationals and sustainable development: Does internationalization develop corporate sustainability of emerging market multinationals?

Multinationals and sustainable development: Does internationalization develop corporate sustainability of emerging market multinationals?

Protecting Markets from Society

Firm Growth and Legal Environment

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