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The Influence of Investor Protection and Legal Origin on Equity Market Size / Investeringsskydd och Legalt Ursprungs Inverkan på Aktiemarknaders Storlek

<p>This thesis examines the influence of investor protection and legal origin on equity market size. Previous studies have shown a relationship between legal origin and equity markets as well as quality of law. We examine whether there are any relationship between stock market capitalization as a percentage of GDP, private property rights, anti director rights and legal origin.</p><p>We use data from 49 countries in our sample that is collected from the World Bank, Heri-tage foundation and La Porta et al. (1998). Our study is based upon a cross-sectional re-gressions and a variance analyzes.</p><p>Our results show that property rights as well as anti director rights have a positive relation-ship to stock market capitalization as a percentage of GDP. We could not find any signifi-cant results in our regressions that stock market capitalization as a percentage of GDP can be explained by legal origin.</p><p>We consider previous conducted studies regarding legal origin to have exaggerated legal origins’ impact on equity markets. Equity markets are more related to the level of develop-ment in countries, no matter legal origin.</p>

Identiferoai:union.ndltd.org:UPSALLA/oai:DiVA.org:hj-985
Date January 2007
CreatorsHedefält, Håkan, Svensson, Fredrik
PublisherJönköping University, JIBS, Economics, Jönköping University, JIBS, Economics
Source SetsDiVA Archive at Upsalla University
LanguageEnglish
Detected LanguageEnglish
TypeStudent thesis, text

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