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This paper examined legal rules covering protection of corporate shareholders and creditors, the origin of these rules, and the quality of their enforcement in 49 countries and found that common law countries generally have the strongest, and french civil law countries the weakest, legal protections of investors, with German and Scandinavian countries located in the middle.Abstract:
This paper examines legal rules covering protection of corporate shareholders and creditors, the origin of these rules, and the quality of their enforcement in 49 countries. The results show that common†law countries generally have the strongest, and french civil law countries the weakest, legal protections of investors, with German†-and Scandinavian†-civil†law countries located in the middle. We also find that concentration of ownership of shares in the largest public companies is negatively related to investor protections, consistent with the hypothesis that small, diversified share†holders are unlikely to be important in countries that fail to protect their rights.read more
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Africa's Growth Tragedy: Policies and Ethnic Divisions
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Law, finance, and firm growth
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Large Shareholders, Monitoring, and the Value of the Firm
TL;DR: In this paper, the authors propose that dispersed outside ownership and the resulting managerial discretion come with costs but also with benefits, and demonstrate that monitoring and hence ownership concentration may conflict with performance-based incentive schemes.
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The Choice of Stock Ownership Structure: Agency Costs, Monitoring, and the Decision to Go Public
Marco Pagano,Ailsa Röell +1 more
TL;DR: In this article, the authors consider a company's controlling shareholders and show that the optimal ownership structure generally involves some measure of dispersion, to avoid excessive monitoring by other shareholders, and that the incentive to go public is stronger, the larger the amount of external funding required.
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Accounting standards and value relevance of financial statements: an international analysis
TL;DR: The authors found that the use of accrual accounting (versus cash accounting) negatively affects the value relevance of financial statements in countries with weak or no shareholder protection, while this negative effect does not exist in countries that have strong or no shareholders protection.