Legal Origin Research Articles

An Empirical Investigation of the Legal Origin Theory for Minority Investors Protection

Though there is criticism of the legal origin view of minority investor protection, there is no controversy about the importance of protecting them.2 The main criticism of the theory is the theoretical link between legal system and investor protection. Researchers suggests that high judicial independence (LaPorta et al. 2004), a quality legal system (Johnson et al. 2000), high protection to private property (La Porta et al. 1999) are reasons for greater protection of minority shareholders in common law countries. However, past studies do not show how these variables link legal system and minority investor protection. This paper helps to fill in this gap by empirically testing that these inherent qualities of a legal system help better legal enforcement in a country and this in turn protect minority investors which finally improves economic development of a country. The pro legal origin theory researchers suggests that legal origin is not a destiny; quality legal reform, reform sensitive to legal tradition and reform enforcement as means of minority investors right improvement (LaPorta et al. 2008). Therefore, the study on how legal enforcement links legal origin to minority investor protection can help understand Legal Origin Theory better and strengthen its theoretical underpinnings; thus it suggest policy makers whether a country should follow legal reform route to protect minority investors or not; and if they follow this route what factors they should consider implementing legal reform as a means for protecting minority investors.

The Benefits of PSM: An Oasis or a Mirage?

AbstractScholarly interest in public service motivation (PSM) has yielded a vast amount of research, exploring its potential for benefitting public-sector organizations through increased employee job satisfaction, enhanced individual performance, employee retention, and enhanced organizational commitment and citizenship behavior. However, a closer inspection of the literature reveals mixed empirical evidence for each impact of PSM. The present study carries out a meta-analysis of five key impacts of PSM to explain the divergence of results in the existing literature. We find evidence of the existence of a true effect for PSM over all the dependent variables, except for turnover intentions. In addition, we find a possible explanation for the mixed empirical evidence found in previous studies. We demonstrate that individual and organizational benefits of PSM are not accrued equally in all public sector workplaces and that the contextual variables legal origin and endemic countrywide corruption influence the extent to which PSM can produce positive outcomes in the workplace.

Britain and Brexit: A forecast of the future of employment protection during corporate insolvency

AbstractBrexit has produced a lot of uncertainties in the UK, not the least of which are the future of protections that have been derived from EU social policy Directives. Arguably, the UK's membership in the EU has pushed it further into a socially liberal and protective framework that it might not have adopted had it remained outside of the EU's sphere of influence. The question now is what direction the UK will take with regard to both the rescue culture and the social protections, both of which have been highly influenced by EU law and policy. The UK has ever been the “odd man out” in the EU, springing as it does from a significantly different legal origin than the Franco/German model at the heart of the EU. Examining the developmental path of other common law jurisdictions (America, Canada, and Australia) whose legal systems are derived from the British may be instructive in relation to the direction the UK might have taken had it not joined the EU, with a particular focus on the employment protections derived from the EU which are often applicable during insolvency and rescue procedures. An analysis of this counterfactual position may then also provide a clue or forecast as to the direction that the UK may take following Brexit.

Features of the formation and development of electronic transactions in the Republic of Kazakhstan and foreign countries

The article is devoted to the study of the process of introducing new information technologies intocivil law relations, which occupies a special place not only in society and the market of Kazakhstan, butthroughout the world. The article considers not only electronic transactions (contracts) concluded onthe Internet that allow you to engage in distance trading, but also the formation of the first prototypesof Internet transactions. In addition, the article presents the history of the adoption of normative legalacts on electronic transactions, as well as their legal features in the United States, EU countries and theRepublic of Kazakhstan.The purpose of this article is to analyze information technologies that led to the emergence ofelectronic transactions, dividing into stages the history of the formation of electronic transactions inKazakhstan and abroad, studying the history of the legal origin of the concept of electronic transactions. The methodological basis of the article is composed of general scientific and special methods ofcognition such as systemic, logical-legal, historical and concrete sociological.The practical significance of the article lies in the possibility of using conclusions and proposals toimprove legislation in the field of electronic commerce by comparing the history of electronic transactionsbetween countries. The research results can be used in a practical analysis of the concept of electronictransactions, in the process of studying and explaining the institution of transactions.The theoretical foundations, content and conclusions discussed in the article complement and developmany sections of civil law and contract law.Key words: electronic transaction, Internet resources, information technology, electronic document.

METHOD OF LEGALIZATION (LAUNDERING) OF PROPERTY, OBTAINED BY CRIMINAL WAY

The relevance of the article is that the processes taking place in society in recent decades in connection with the transition from a rigid centralized model of governance to market relations, have significantly changed the economic, social and legal systems. The rapid development of foreign economic relations, the foreign exchange market, the implementation of relevant norms of international law - all this contributes to the integration of Ukraine into the world economic space. At the same time, these processes have a number of negative consequences, such as: criminalization of society, commission of criminal offenses in the field of management, in particular, legalization (laundering) of property obtained by criminal means. The article establishes that such actions are characterized by a certain deception, as the proceeds of crime are given the appearance of legal origin, and are implemented taking into account the sphere of economic activity, the specific situation of money laundering, the nature of income. Money laundering is a complex and rather long process that includes many technological schemes. The method reflects a set of actions (operations) to prepare, commit and hide in their dynamics and relationships with environmental conditions. The main ways of committing such a crime are: financial transactions for the transfer of funds abroad ("offshore zones"); illegal conversion of funds using fictitious enterprises (stages of conversion - illegal income is placed in certain financial instruments; they are separated from sources of origin by using various schemes of financial transactions aimed at masking the traces of these incomes; give legitimacy to criminally obtained income); money laundering through financial transactions with securities (legalization is carried out on the stock market, through predicate criminal offenses, using securities, their issue, trade and resident countries, non-residents or in several countries); money laundering through real estate transactions (abuse on the real estate market); money laundering in the process of privatization of state property (obtaining the opportunity to exercise control over as large shares of statutory funds as possible, with minimal financial costs for their acquisition, using official position or exceeding power).

Fortificaciones elementos defensivos y organización militar en los fueros castellanos y leoneses de la Edad Media (Siglos XI-XIII)

Les Fueros municipaux castillans du XI au Xllltanc siècles fournissent une information assez riche sur les origines juridiques et institutionnelles de l'alcaidia de forteresses, institution à caractère militaire, dont l'objectif était de réglementer le fonctionne­ment et gouvernement intérieur des châteaux du royaume. Bien que ces textes offrent encore une réglementation dispersée et asystématique, ils recueillent pour la première fois des dispositions organisant l'office d'alcaide, les services de surveillance, les travaux de réparation et d’entretien des fortifications, etc. Ces aspects seront par la suite élargis et améliorés avec la législation des Par1idas ou de l' Espéculo. Les préceptes forales mettent aussi en relief l’importance des activités militaires au sein des concejos castellano-leoneses, coincidant avec une période de grande confrontation année entre les chrétiens et les musulmans.

Legal Origins and Corporate Social Responsibility

The legal origin literature documents that civil and common law traditions have different impacts on economic outcomes. We contribute to this literature by formulating and testing hypotheses on the effect of legal origins on corporate social responsibility, overall and in different specific dimensions. We find that, net of industry-specific effects, companies in common law countries score higher in corporate governance and community involvement, while those in countries belonging to the French legal tradition of civil law do better in human resources. We also observe no significant differences in terms of environmental protection among companies in civil and common law countries, which we attribute to a progressive convergence towards common industry sustainability standards.

Political instability and political terror: Global evidence on persistence

We test the hypotheses that fundamental characteristics in regional proximity, landlockedness, religious‐domination, legal origin, and income levels affect cross‐country differences in the persistence in political terror and political instability in 163 countries for the period 2010–2015. The empirical evidence is based on generalised method of moments. The hypotheses are that the following are associated with comparatively higher levels of persistence in political terror and political instability: regions with predominantly low income countries (Hypothesis 1); landlockedness (Hypothesis 2); Christian‐orientation (Hypothesis 3); French civil law (Hypothesis 4); and Low income (Hypothesis 5). The tested hypotheses are largely invalid. Only Hypotheses 5 and 2 are robustly investigated in the light of concerns about instrument proliferation. Hypothesis 2 is valid for political terror but not for political instability while Hypothesis 5 is neither valid for political instability nor for political terror.

How Does the Various Sectors of the Financial Market Influence Growth Around the Globe?

We explore the links between financial markets, institutional quality and economic growth. We document that the unconditional effect of finance on growth is ambiguous. This variation is caused by regional bloc, income level and legal origin differences. Our results suggest that, for financial development (banking sector, insurance sector, stock market) to elicit positive effect on growth, there needs to be an effective institutional framework in place. However, in cases where finance in itself elicits positive effect on growth, further tightening of the institutional framework could be harmful to growth; hence, must be done with caution. Policy implications are discussed.

Cultural risk and management strategy for Chinese enterprises' overseas investment

Cultural differences between countries are the primary causes of cultural risk for foreign direct investment. The risk is associated with differences in language, religious belief, legal origin and other factors, in which values play a recessive and influential role. The paper shows that the potential cultural risk is minimal in the ASEAN region and transnational enterprises can adopt the investment strategy taking Chinese culture as the dominant culture. The potential cultural risk in Central Asia, South Asia and Commonwealth of Independent States is moderate, and transnational enterprises can adopt the investment strategy taking the integration of Chinese culture and host culture as the dominant culture. However, the potential cultural risk is great in Central and Eastern Europe and the Western Asia region. Therefore, transnational enterprises should adopt the investment strategy adaptive to host culture as the dominant culture.

The tangled historical roots of entrepreneurial growth aspirations

AbstractResearch SummaryWe consider what configurations of historical and geographic dimensions influence entrepreneurial growth aspirations (EGA). Our theoretical framework combines geography (coastal location, resource dependence), long‐term colonial history (ethnic heterogeneity, legal origins), and postcolonial history (low levels of conflict and population displacement; not having “bad neighbors”). We employ abductive reasoning to link the social science and historical literatures via analytically structured histories of Ghana, Nigeria, and Angola. Next, we undertake a fuzzy set qualitative comparative analysis on sub‐Saharan Africa countries to investigate which particular configurations of these dimensions are important for EGA. We demonstrate the importance of configurations over individual variables and add context‐bound dimensions to the study of entrepreneurship in developing countries, through historical analysis.Managerial SummaryOur analysis may offer entrepreneurs a template for identifying potential opportunities and threats in order to calibrate their strategies for scaling up their venture in sub‐Saharan Africa. We argue that environments rich in entrepreneurial growth opportunities are associated with configurations where negative aspects are more than compensated by positive ones. For Botswana, the low levels of internal conflict compensate for unfavorable location. For Angola, the positive impact of coastal location and relatively low ethnic heterogeneity counterbalance the negative effect of resource rents. Resource‐driven economies are more entrepreneurial: better economic opportunities can sometimes result from having extractive industries. For African entrepreneurs it is not only relevant what happens in their own countries, as their opportunities are directly affected by economic or political turmoil in neighboring countries.

Corporate Control around the World

ABSTRACTWe study corporate control tracing controlling shareholders for thousands of listed firms from 127 countries over 2004 to 2012. Government and family control is pervasive in civil‐law countries. Blocks are commonplace, but less so in common‐law countries. These patterns apply to large, medium, and small firms. In contrast, the development‐control nexus is heterogeneous; strong for large but absent for small firms. Control correlates strongly with shareholder protection, the stringency of employment contracts and unions power. Conversely, the correlations with creditor rights, legal formalism, and entry regulation appear weak. These patterns support both legal origin and political theories of financial development.

Origins resting behind banking financial accountability of paragraphs 78 to 82 of the First Schedule of the Companies Act 1862 (UK)

ABSTRACT Applying tenets of legal origin theory, this paper traces the origins of banking financial accountability resting behind paragraphs 78 to 82 of the First Schedule of the Companies Act 1862 (UK), where the timely disclosure of a balance sheet and statement of income and expenditure to stakeholders are scrutinised. Comparative legal analysis of 503 banking enactments of the US, Canada and England during the eighteenth and nineteenth centuries reveals that expectations of formal accounts raised by the Companies Act 1862 (UK) were informed by the Colombia Banking Act 1817 (CO) in the US, the Canadian Mauritius Regulations 1830 and the Joint Stock Banks Act 1844 (UK).

Financing patterns in transition economies: Privatized former SOEs versus ab initio private firms

We employ 37,987 firms in 30 transition economies to investigate the relation between the origins of private firms and their financing patterns. We find that relative to ab initio (from the beginning) private firms, privatized former state-owned enterprises (SOEs) finance a higher proportion of their fixed assets from bank finance (especially from state-owned banks) and supplier credit. We argue that privatized former SOEs continue to benefit from the political and financial connections established during their SOE era. We document that country governance, financial development and legal origins play an important role in the financing patterns of privatized versus private firms.

Clima como uma “Preocupação” ou um Património Comum? Os fundamentos jurídicos da emergência climática

When, in the 1980s, climate change entered into the UN agenda, the first question raised was: "What is the climate from a legal point of view?" After the Maltese proposal of 1988 to recognize “Climate as Common Heritage of Humankind”, the adopted UN resolution considered climate as “common concern of humanity”. The concern approach has transformed the positive approach of the Maltese initiative on “the heritage” into a negative approach of a damage containment and sharing system with an undefined obligation to cooperate. This fact makes it technically impossible to build an economy capable of producing positive impacts to recover a well-functioning of the Earth System, and consequently a stable climate. The fact is it fails to build an economic and governance system around the maintenance in a favorable condition of a common good that although intangible exists in natural world and is the very support of life. This paper briefly explores the legal origin of the climate negotiating deadlock resulting from the common concern approach, and the economic and social consequences of the legal non-existence of climate, i.e. a well-functioning Earth System, and points out to the concept of heritage as a way to overcome the obstacles that have prevented collective action.

Do Legal Origins Predict Legal Substance?

There is a large body of research in economics and law suggesting that the legal origins of a country—that is, whether its legal regime is based on English common law or French, German, or Nordic civil law—profoundly impacts a range of outcomes. However, the exact relationship between legal origins and legal substance has been disputed in the literature, and not fully explored with nuanced legal coding. We revisit this debate while leveraging novel cross-country datasets that provide detailed coding of two areas of laws: property and antitrust. We find that having shared legal origins strongly predicts whether countries have similar property regimes, but does little to predict whether countries have similar antitrust regimes. Our results suggest that legal origins may be an important predictor of legal substance in well-established legal regimes, but do little to explain substantive variation in more recent areas of law.

Poverty in Sub-Saharan Africa: The Role of Business Regulations, Policies and Institutions

The study investigates the impact of business regulations, policies and institutions on welfare in Sub-Saharan Africa. The HDI and GDP per capita are used as measures of welfare or poverty. The World Bank doing business indicators are used as business regulatory measures and the Country Policy and Institutional Assessment are also used as policies and institutional quality measures. The study employs systems GMM estimation technique in examining these relationships. The results show improved welfare in SSA countries to be associated with less burdensome regulations on starting business. The results reveal that merely pursing regulations in respect of business operations and closure such as those related to getting electricity, protecting minority interest, paying taxes and resolving insolvency as a strategy to improve welfare directly does not work unless done within a milieu of sound policies and institutions. There are however threshold values at which policy and institutional quality indexes can complement regulations to improve welfare. Following a formal sample-splitting, the study finds some differences in these relationships explained by the income status as well as the legal origin of the countries. Policy implications are well discussed.

Economic freedom and Hofstede’s cultural dimensions

Purpose The purpose of this paper is to investigate the influence of broad cultural dimensions, as well as those of religion and legal origin, on countries’ economic freedom, i.e., trade freedom, investment freedom, business freedom, labor freedom, monetary freedom, as well as a composite measure of economic freedom. Design/methodology/approach Linear regression of publicly available data regarding economic freedom (Miller et al., 2018) on cultural dimensions (Hofstede, 2009), legal origin and religion (LaPorta et al., 1999) for 52 countries was performed to determine the impact of these factors on economic freedom. Findings Results indicated femininity was the cultural dimension associated with the most measures of economic freedom. Short-term-oriented cultures were predictive of greater business freedom, while more restrained cultures were associated with greater business and monetary freedoms. Higher individualism was predictive of greater monetary freedom. Catholicism positively predicted investment freedom and negatively predicted business freedom. French civil law negatively predicted labor freedom, while socialist legal origins positively predicted trade freedom, but negatively predicted business freedom. Originality/value This is the first study to examine the impacts of culture, law and religion on economic freedom. One practical implication of this research is that countries would be wise to emphasize more feminine aspects in their cultures, as these are associated with greater economic freedom. Even minor adjustments that move in the direction of cooperation and fair processes might help increase economic freedoms and the many benefits that stem from such freedoms.

Legal origin, financial development, and innovation: evidence from large public and private firms in the U.S. and Europe

This paper investigates the interplay between legal origin, financial market development, and the growth and innovation patterns of the population of large firms in U.S. and Europe. We document that common law countries (namely U.S., U.K., and Ireland) are characterized by a higher degree of stock market development and an increased propensity of firms to be publicly traded relative to Continental Europe. We also find that firms based in common law countries are more innovative, consistent with the view that market-based systems are more capable of financing intangible assets than bank-based systems. Also, these systems are effective at accelerating firm growth, as large firms in common law countries are sensibly younger and went public earlier than their Continental European peers, and this is particularly true for innovative firms.

“What’s He a Judge Of?”: Blood Meridian’s Paths of Law

This article reads Cormac McCarthy’s Blood Meridian as a legal allegory. It focuses on the novel’s mysterious villain, Judge Holden, and traces three titular “paths of law.” First, it reads Blood Meridian as a self-deconstructing legal origin myth, arguing that the murderous but cultured Holden reveals the law’s tautological foundations by blurring Walter Benjamin’s binaries of “lawmaking” and “law-preserving” violence. Second, it construes the judge’s destructive pursuit of natural science as allegorizing the violence of legal interpretation, in which the validation of one interpretation entails the destruction of all others. Finally, it finds a counterpoise to Holden’s juridical violence in the cryptic epilogue, in which the possibility of meaning is not arbitrarily narrowed but endlessly proliferated.