Citation:
LaPorta, Rafael. 1998. “Capital Markets and Legal Institutions”. Copy at http://www.tinyurl.com/y2g8rjnq
Abstract:
In this paper, we focus on the institutions required to support large capital markets and survey the empirical evidence on the link between legal institutions and financial markets. Specifically, we are interested in providing an answer to why we observe such large differences in the size, breadth and valuation of capital markets? Why, for example, are equity markets so much larger in South Africa than in Mexico or Peru? Why did many companies go public in India and Hong Kong in 1995, while no company went public in Brazil or Uruguay or Venezuela in the same year? Why do countries like New Zealand have large credit markets while Argentina and Colombia do not have them?