Legal Origin Research Articles

Institutional Investor Legal Origins and Corporate GHG Emissions Disclosure Quality

The disclosure of corporate environmental performance is an increasingly important element of a firm’s ethical behavior. Building on stakeholder theory and legitimacy arguments as well as prior research that proposes legal origin as a major determinant of corporate social responsibility (CSR), we examine how foreign institutional ownership and its legal origin affect the quality of carbon disclosure. Using a large sample of firms from 36 countries, we find that foreign institutional owner-ship from civil law countries improves the quality of a firm’s greenhouse gas (GHG) emissions reporting, as indicated by emissions verification levels and Carbon Disclosure Project scores. This relation is robust to addressing endogeneity and selection bias. This relation is more pronounced in firms from non-climate-sensitized countries, for which the gap between firms’ CSR standards and investors’ CSR targets is potentially larger, and in less international firms. Further analyses indicate that firms with a better GHG emissions reporting quality exhibit higher valuations.

Ancestral Norms, Legal Origins, and Female Empowerment

Ancestral Norms, Legal Origins, and Female Empowerment

Historical Determinants of Modern Finance: Evidence from Initial Coin Offerings

This paper examines the impact of historical endowment on the function of Initial Coin Offering (ICO) market. We find that a country’s legal origin, disease environment, exposure to slave trade, and proximity to ancient trade routes are important determinants of the total amount of capital raised through ICOs. Further analyses suggest that the impact of historical endowment operates through legal and information sharing institutions. This finding suggests that history plays an important role in shaping modern finance, even after addressing the simultaneity and reverse causality concerns.

The Effects of Mobile Phone Technology, Knowledge Creation and Diffusion on Inclusive Human Development in Sub-Saharan Africa

This paper examines the joint effects of mobile phone technology, knowledge creation and diffusion on inclusive human development in 49 sub-Saharan African (SSA) countries. The empirical evidence is based on Tobit regressions for the period 2000-2012. The net effects of interactions between the mobile phone, knowledge creation and diffusion variables are positive indicating that the combined effects of these variables improve inclusive human development in SSA countries. Further analysis dividing the data set into a number of fundamental characteristics based on economic, legal, religion and political stability associated with African economies show that mobile phone penetration and associated innovation in SSA improve inclusive human development irrespective of the country’s level of income, legal origins, religious orientation and the state of the nation. The pupil-teacher ratio exerts a negative influence on the outcome variable which is favorable for inclusive human development because higher ratios denote lower education quality since more pupils are accommodated by fewer teachers. The study contributes to innovation diffusion theory and economic development literature.

The Comparative Economics of Financial Access in Gender Economic Inclusion

The study has investigated the comparative importance of financial access in promoting gender inclusion in African countries. Gender inclusion is proxied by the female labor participation rate while financial channels include: financial system deposits and private domestic credit. The empirical evidence is based on non-contemporary Fixed Effects regressions. In order to provide more implications on comparative relevance, the dataset is categorized into income levels (middle income versus (vs.) low income); legal origins (French civil law vs. English common law); religious domination (Islam vs. Christianity); openness to sea (coastal vs. landlocked); resource-wealth (oil-poor vs. oil-rich) and political stability (stable vs. unstable). Six main hypotheses are tested, notably, that middle income, English common law, Christianity, coastal, oil-rich and stable countries enjoy better levels of “financial access”-induced gender inclusion compared to respectively, low income, French civil law, Islam, landlocked, oil-poor and unstable countries. All six tested hypothesis are validated. This is the first study on the comparative importance of financial access in gender economic participation.

Corporate environmental performance, legal origin, and investor protection

Global environmental disasters caused by corporate malfeasance have raised the public's consciousness for improvements in corporate environmental performance (CEP). There are many unknowns in the d...

Drivers and Persistence of Death in Conflicts: Global Evidence

We investigate persistence and determinants of deaths from conflicts in a sample of 163 countries for the period 2010 to 2015. The empirical evidence is based on Generalised Method of Moments. First, the findings are contingent on income levels, religious-domination, landlockedness, regional proximity and legal origins. The persistence of deaths in internal conflict is more apparent in coastal, French civil-law and Islam-oriented countries, compared to landlocked, English common law, Christian-oriented countries, respectively. Second, the following factors are generally responsible for driving deaths from internal conflicts: homicides, conflict intensity and conflicts fought. Furthermore, incarcerations have negative effects on internal conflicts. Justifications for the established tendencies and policy implications are discussed.

Corporate environmental performance, legal origin, and investor protection

Corporate environmental performance, legal origin, and investor protection

Laissez Les Bons Temps Rouler? The Persistent Effect French Civil Law Has on Corruption, Institutions, and Incomes in Louisiana

Louisiana consistently ranks as one of the most corrupt states in the nation. In fact, the Pelican State is the most corrupt state when looking at the most common indicator of corruption: corruption convictions per 100,000. What is less clear about Louisiana is how the state became corrupt. This paper seeks to provide the missing link. I argue that the high levels of corruption in the state can be explained by its origins in French civil law. This historical influence has perverse and persistent effects on the state, despite occurring over two hundred years ago. Through these origins in civil law, corruption in Louisiana impacts its economic institutions. These institutions then cause a variety of other bad outcomes in the state such as a high dependency on oil and low incomes. This argument implies that resource dependency is bad for development only when institutional quality is low. By linking legal origins to corruption, institutions, and economic outcomes, I seek to offer a clearer explanation for why Louisiana sets itself apart from other states in its politically corrupt environment.

Germanic or Roman? Western European Narratives of Legal Origins

Germanic or Roman? Western European Narratives of Legal Origins

ЩОДО ПИТАННЯ ПРО РЕФОРМУ АДМІНІСТРАТИВНОГО ЗАКОНОДАВСТВА В РЕСПУБЛІЦІ БІЛОРУСЬ 2020 РОКУ (ЧАСТИНА 2)

First part of this article published in the current year journal’s issue no. 1 was concerned on methodological approaches to administrative legislation reformation in Belarus with regard to amendments to conceptual issues of administrative offences classification, system revision and differentiation of administrative penalties, reconsideration of essence of legal entities’ administrative responsibility, etc. Second part of this article is concerned on issues of administrative legislation reformation. It has been noted that improvement of legislation on administrative responsibility in Republic of Belarus should be carried out in full accordance with peculiarities of norms’ content and composition, concept of publicity and consequently public and fault-based responsibility for offence commitment. Matters of administrative legislation reformation from the perspective of synchronization of grounds for administrative responsibility with grounds for criminal responsibility and institute of such responsibility, expulsion of irrelevant and minimization of formal bodies of administrative offences (as well as offences having civil legal origin) from the Code of Republic of Belarus for Administrative Offences have been studied. The existence of problem of differentiation of amount of fine correlation as criminal punishment and as administrative penalty (such amounts are not synchronized and not harmonized between each other resulting in erosion of borderline between crimes and administrative offences) has been substantiated. It has been suggested to prescribe in court (or other authority empowered to conduct an administrative case) resolutions of penalty administration in the form of reprimand the recommendations on removal of causes and conditions of administrative offence committing and also to amend wording of Article 6.4 “Reprimand” of the Code of Republic of Belarus for Administrative Offences.

Dividend Smoothing and Investor Protection

Abstract This paper examines the agency model of dividends where the importance of dividends depends on the level of investor protection. The importance of dividends is presented by the dividend smoothing concept, while the level of investor protection is determined by the legal origin. Within this, the sensitivity of dividends to earnings changes was analyzed to examine the universality of the dividend smoothing phenomenon. Subsequently, the difference in proportions of dividend smoothing firms within the common law and civil law countries was tested to determine which of these two systems attributes more importance to dividends. Finally, the application of Lintner’s model was examined in transition countries as well as in United States. Research results show that dividend smoothing is a globally widespread phenomenon, but the likelihood to reduce or cut dividends is greater in civil law countries. Also, the largest percentage of dividend smoothing firms was recorded in common law countries.

THE EFFECTS OF ACCOUNTABILITY, GOVERNANCE CAPITAL, AND LEGAL ORIGIN ON REPORTED FRAUDS

An institutional perspective is employed to illuminate the complexity of frauds in various diverse economies, in order to enhance the efficacy of previous accounting concepts. In this study, the effects of the legal, regulatory and human framework of the strength of auditing and reporting standards, and the governance capital related to global sustainable competitiveness and economic growth, etc. are analysed by linear regression (OLS) methods. Moreover, the role of other indicators i.e. financial freedom, the extent of director liability and legal origin, are interrelated with the number of fraud cases. From the results, it appears that an increased level of governance capital, financial freedom from government pressure, strengthened transparency and more protected minority investors through liable directors might increase the number of reported fraud cases in the countries and years examined. The existence of legal origin also seemed to be an appropriate proxy for an improved understanding of fraud characteristics. This evidence suggests it is worth investigating in depth the nature of financial crimes across countries for a better understanding of this phenomenon. In this way, these findings might have sufficient potential in the case of adequate policy implications within a less litigious business environment to resolve the undesirable consequences of impending financial downturns, and to achieve sustainable competitiveness and economic development.

Non-Preferential Origin and ‘Made in Italy’

This article examines the rules on non-preferential origin under international law, the European Union (EU) law and Italian law. In particular, the article explains that while the Union Customs Code (UCC) provides rules on non-preferential origin in EU level, the EU Member States may adopt national laws that are in full compliance with the EU Treaties and regulations. The article then examines the Italian legal framework providing rules on non-preferential origin. In addition, the article highlights the difference between ‘intellectual property rights’ (where the trademarks are found), the ‘made in’ regulation and the provisions on ‘product labelling’. The article further analyses the problems that have emerged over time in relation to the ‘false indication of origin’ and the ‘fallacious indication of origin’ under the Italian legislation, and how the regulatory provisions have developed over time. The article emphasizes the importance of the discipline of ‘made in’ for Italy due to the ‘manufacturing’ vocation of the country. Finally, the evolution of the jurisprudential orientation is represented by an address of ‘legal origin’ (understood as traceability of an asset to a particular producer, without detecting the connection of the asset to the territory), to the recognition of a ‘customs origin’ which, on the other hand, takes the territory into consideration.

Legal Systems, National Governance and Renewable Energy Investment: Evidence from Around the World

AbstractThis paper examines renewable energy (RE) investment and the role of a country's legal system in shaping investment decisions. Analysing data from 236 renewable energy companies between 2000 and 2017 across the world, our study establishes that those in a common law system are more responsive to growth opportunities in RE investment, while facing greater financial constraints than their counterparts in civil law systems. Our study demonstrates that the global imbalance in RE development is caused by the influence of a country's legal system, which determines the regulatory and business ethos that impacts on the trajectory of investment, and by the varying degrees of accountability implicit in a country's governance environment. Our research raises the implication that the opportunity costs of forgone economic gains are in direct conflict with long‐term environmental goals, retarding the transition from carbon‐based to sustainable sources of energy, and provides insights into how development can be stimulated by fiscal incentives, favourable regulations, societal engagement, improved access to finance and the alignment of national strategies. Our findings contribute to the economic literature of legal origin theory and establish fundamental principles for refining global RE development strategy and confronting the challenge of climate change.

Comparing legal styles

AbstractThe question of legal ‘style’ is a central one in comparative law, as mainstream comparative law tends to downplay its importance. The kinds of comparative law scholarship that have attracted most attention in the last decades – the ‘harmonisation projects’ and the ‘legal origins’ literature (perhaps also the ‘legal formant’ literature) – indeed adopt a functionalistic approach to legal systems, whereby only the outcome of judicial decisions (and the factors causally feeding into them) matters – that is, their style does not. This narrow perspective has led to arguments in favour of harmonisation of law worldwide – the thesis according to which law everywhere does and should converge so as to facilitate transnational commerce and globalisation more generally. I propose to argue that legal style matters, as law is about much more than just resolving disputes. Specifically, it is also, and most importantly, a collective statement of identity. To illustrate, I plan on analysing some of the most striking stylistic differences between French and English law, and outline the different such statements emerging from them.

Corporate governance, accounting transparency and stock exchange sizes in Germany, Japan and «Anglo-Saxon» economies, 1870–1950

Abstract Modern discussions of corporate governance have focused on convergence of «varieties of capitalism», particularly the recent «Americanisation» of laws and voluntary codes in Germany, Japan, and other civil law countries. However German and Japanese legal and business historians have suggested that corporate governance, accounting transparency or other favourable factors in their countries were historically a match for – or even superior to – those in the US. An alleged consequence was deeper penetration by the Berlin and Tokyo stock exchanges of their domestic economies than of the US by the New York Stock Exchange (NYSE), using measures such as market capitalization/GDP ratios. This paper reviews the classic Rajan and Zingales data on the sizes of stock exchanges. It concludes that the evidence for Japanese historical precocity relative to the US, after the necessary allowance is made for regional stock exchanges and corporate bond finance, stands up better to this closer examination than that for Germany. Many financial historians now agree that stock exchange development was not historically determined by legal origins («Anglo-Saxon» common vs Euro-Japanese civil law), though today it appears to be driven by legal rules protecting shareholders and/or bondholders and limiting directorial autocracy and information asymmetry. However, both today and historically in some cultures private order rules (voluntary codes, bourse listing requirements, bankers as trusted intermediaries, block-holder monitoring, etc) offered substitute protections, or at least complemented protective laws. This paper reviews the plausibility of these determinants of historical stock exchange sizes – and others that have been neglected – in Japan, Germany, and elsewhere, before 1950.

Acercamiento a una justicia restaurativa electoral en el contexto de los pueblos originarios de Chiapas

En escenarios de diversidad cultural, cada pueblo cuenta con su propio sistema normativo electoral para validar y elegir a sus representantes; por ejemplo, el hecho de que los acuerdos en las comunidades surjan después de largas discusiones o que la elección de autoridades sea resultado de votaciones abiertas y públicas garantiza que los acuerdos que se tomen tengan legitimidad y que las autoridades electas sean personas de reconocido prestigio y comprometidas con su comunidad, obligadas además a rendir cuentas de sus acciones. La interculturalidad y la justicia restaurativa pueden ser parte de un mismo discurso y de manera conjunta construir una metodología que en materia de justicia electoral en los pueblos originarios de Chiapas permita obtener la mejor solución posible en los conflictos de su competencia como los relacionados con la legitimidad de la autoridad municipal, lo que coadyuva a evitar una escalada de violencia, diseñar mejores políticas públicas en materia judicial electoral y contextualizar el derecho de autodeterminación de los pueblos originarios de Chiapas. La dinámica social de Chenalhó es un ejemplo de cómo los conflictos de origen social, político y jurídico dificultan la gobernabilidad y la legitimación de la autoridad.

Corporate Governance Regulation, Legal Origin, and Access to Credit: A Cross-European Comparison

Corporate Governance Regulation, Legal Origin, and Access to Credit: A Cross-European Comparison

Examining National Variation in Segregation through the Lens of a Gendered Theory of Legal Origins

Examining National Variation in Segregation through the Lens of a Gendered Theory of Legal Origins