Massenot, Baptiste (2010): Financial development in adversarial and inquisitorial legal systems.
Download (136kB) | Preview
This paper analyzes how the adversarial and inquisitorial evidence collection procedures affect financial development. In investigating the true returns of insolvent entrepreneurs, the adversarial procedure relies on lawyers whereas the inquisitorial procedure relies on judges. Investors are willing to lend more in adversarial than in inquisitorial legal systems if they are richer than entrepreneurs or if lawyers are more productive than judges. Manipulation of evidence by lawyers has an ambiguous impact on finance. The empirical evidence shows that a more inquisitorial procedure is associated with less developed financial markets.
|Item Type:||MPRA Paper|
|Original Title:||Financial development in adversarial and inquisitorial legal systems|
|Keywords:||legal origin; financial development; adversarial; inquisitorial|
|Subjects:||O - Economic Development, Technological Change, and Growth > O1 - Economic Development > O16 - Financial Markets; Saving and Capital Investment; Corporate Finance and Governance
K - Law and Economics > K4 - Legal Procedure, the Legal System, and Illegal Behavior > K41 - Litigation Process
|Depositing User:||Baptiste Massenot|
|Date Deposited:||01. Dec 2010 14:29|
|Last Modified:||16. Feb 2013 01:59|
Anderlini, L., L. Felli, G. Immordino, and A. Riboni (2010). Legal Institutions, Innovation and Growth. Working paper.
Banerjee, A. and A. Newman (1993). Occupational choice and the process of development. Journal of Political Economy 101 (2), 274–298.
Beck, T., A. DemirguKunt, and R. Levine (2003). Law and Finance: Why Does Legal Origin Matter? Journal of Comparative Economics 31 (4), 653–675.
Bond, P. (2009). Contracting in the Presence of Judicial Agency. The BE Journal of Theoretical Economics 9 (1).19
Botero, J., S. Djankov, R. La Porta, F. Lopez-De-Silanes, and A. Shleifer (2004). The Regulation of Labor. Quarterly Journal of Economics 119 (4), 1339–1382.
Castro, R., G. Clementi, and G. MacDonald (2004). Investor Protection, Optimal Incentives, And Economic Growth. Quarterly Journal of Economics 119 (3), 1131–1175.
Cooley, T., R. Marimon, and V. Quadrini (2004). Aggregate Consequences of Limited Contract Enforceability. Journal of Political Economy 112 (4), 817–847.
Dewatripont, M. and J. Tirole (1999). Advocates. Journal of Political Economy 107 (1), 1–39.
Djankov, S., R. La Porta, F. Lopez-De-Silanes, and A. Shleifer (2003). Courts. Quarterly Journal of Economics 118 (2), 453–517.
Djankov, S., R. La Porta, F. Lopez-de Silanes, and A. Shleifer (2008). The law and economics of self-dealing. Journal of Financial Economics 88 (3), 430–465.
Djankov, S., C. McLiesh, and A. Shleifer (2007). Private credit in 129 countries. Journal of Financial Economics 84 (2), 299–329.
Froeb, L. and B. Kobayashi (2001). Evidence Production in Adversarial V s. Inquisitorial Regimes. Economics Letters 70 (2), 267–272.
Galor, O. and J. Zeira (1993). Income distribution and macroeconomics. The Review of Economic Studies, 35–52.
Gennaioli, N. (2009). Optimal contracts with enforcement risk. Working paper.
Gennaioli, N. and E. Perotti (2009). Standardized Enforcement: Access to Justice vs Legal Innovation. Technical report, working paper.
Gennaioli, N. and A. Shleifer (2008). Judicial Fact Discretion. The Journal of Legal Studies 37. 20
Jappelli, T., M. Pagano, and M. Bianco (2005). Courts and Banks: Effects of Judicial Enforcement on Credit Markets. Journal of Money, Credit, and Banking 37 (2).
Katz, A. (1988). Judicial Decisionmaking and Litigation Expenditure. International Review of Law and Economics 8 (2), 127–143.
La Porta, R., F. L. de Silanes, and Shleifer (2008). The Economic Consequences of Legal Origin. Journal of Economic Literature.
La Porta, R., F. L. de Silanes, A. Shleifer, and R. Vishny (1997). Legal Determinants of External Finance. Journal of Finance 52 (3), 1131–1150.
La Porta, R., F. Lopez-de Silanes, C. Pop-Eleches, and A. Shleifer (2004). Judicial checks and balances. Journal of Political Economy 112 (2), 445–470.
Mahoney, P. G. (2001). The common law and economic growth: Hayek might be right. Journal of Legal Studies 30 (2), 503–25.
Parisi, F. (2002). Rent-seeking through litigation: adversarial and inquisitorial systems compared. International Review of Law & Economics 22 (2), 193–216.
Roe, M. (2000). Political Preconditions to Separating Ownership from Corporate Control. Stanford Law Review 53 (3), 539–606. 21
Shin, H. (1998). Adversarial and inquisitorial procedures in arbitration. The RAND Journal of Economics, 378–405.
Shleifer, A. and D. Wolfenzon (2002). Investor Protection and Equity Markets. Journal of Financial Economics 66 (1), 3–27.
Stulz, R. and R. Williamson (2003). Culture, Openness, and Finance. Journal of Financial Economics 70 (3), 313–349.