The importance of legal systems for portfolio investment in the developing world

Hoon Lee, Joseph L. Staats, Glen Biglaiser

Research output: Contribution to journalArticlepeer-review

3 Scopus citations

Abstract

Building on recent works showing the role that legal institutions can play in attracting foreign investment to developing countries, and drawing on insights obtained from Powell and Rickard (International Interactions 36: 335–362, 2010), we demonstrate that developing countries with common law legal systems attract greater portfolio investment than countries that have civil law or Islamic legal systems because common law systems are more inclined to promote the rule of law and protect property rights and can be understood to provide more efficiency in the law, better contract enforcement, more judicial autonomy and more market-oriented regulations. We base our findings on an analysis of time-series panel data for 99 countries covering the period 1980–2007.

Original languageEnglish
Pages (from-to)339-358
Number of pages20
JournalInternational Area Studies Review
Volume15
Issue number4
DOIs
StatePublished - Dec 2012

Keywords

  • Portfolio investment
  • common law
  • legal systems
  • property rights
  • rule of law

Fingerprint Dive into the research topics of 'The importance of legal systems for portfolio investment in the developing world'. Together they form a unique fingerprint.

Cite this