Abstract
Scholars frequently claim that path dependency of the law, the influence of the US model of corporate governance, and the role of legal origin and the stage of legal development are key for a comparative understanding of shareholder protection. This article, however, suggests that these paradigms of comparative company law gradually seem to disappear. The basis for our assessment is an original leximetric dataset that measures the development of shareholder protection for 30 countries over the last 24 years. Using tools of descriptive statistics, time series and cluster analysis, our main findings are that all legal origins have now in average about the same level of shareholder protection, that paternalistic tools have overtaken enabling tools of protection, and that after the global financial crisis this area has become a less frequent object of law reforms.
Highlights
Scholars frequently claim that the path dependency of the law, the influence of the US model of corporate governance, and the role of legal origin and the stage of legal development are key for a comparative understanding of shareholder protection
Using tools of descriptive statistics, time series and cluster analysis, our main findings are that all legal origins have on average about the same level of shareholder protection, that paternalistic tools have overtaken enabling tools of protection, and that, after the global financial crisis, this area has become a less frequent object of law reforms
Only three countries, ie China, Russia and France, have managed to rise higher than a score of 7.5 in 2013. This possibly suggests that more shareholder protection is not necessarily better, and that company law should strive for optimum rather than maximum shareholder protection, ie it should aim to balance between the different groups that play a role in the governance of companies.[19]
Summary
Recent decades have seen a growing internationalisation in debates about company law. It is suggested that these can be summarised as follows: first, there is the frequent view that the development of company law is path-dependent, and that the core characteristics of a country’s law are persistent and not subject to frequent changes or major shifts.[3] Secondly, it is often thought that a market-oriented conception of company law has become the dominant one, in particular as we may observe an Americanisation of company law in many countries of the world.[4] Thirdly, in order to explain the remaining differences in strength and forms of shareholder protection, many scholars claim that legal origins and the stage of economic development are the most decisive factors.[5] This emergence of paradigms can be thought of as problematic as far as they do not hold up to empirical scrutiny. Based on all of these findings, Part G provides a concluding assessment of the three aforementioned paradigms
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