Patterns of Legal Change: Shareholder and Creditor Rights in Transition Economies

By Katharina Pistor. Corporate Governance Lessons from Transition Economy Reforms, 2000

191 citations recorded by the source corpus.

This paper analyses changes in the legal protection of shareholder and creditor rights in 24 transition economies from 1990 to 1998. It documents differences in the initial conditions and a tendency towards convergence of formal legal rules as the result of extensive legal reforms. Convergence seems to be primarily the result of foreign technical assistance programmes as well as of harmonisation requirements for countries wishing to join the European Union. The external supply of legal rules notwithstanding, the pattern of legal reforms suggests that law reform has been primarily retroactive rather than proactive. In comparison, the pre-socialist heritage of transition economies has little explanatory power for the observed patterns of legal change. A partial exception are countries with German legal heritage, which favour creditor over shareholder protection and display substantially better creditor protection than other transition economies. The paper discusses the implications of the response pattern of legal change with externally supplied legal solutions for the prospects of effective law enforcement and compliance with the law in transition economies.

Subfields: Accounting, Strategy and Management

View Paper: https://www.semanticscholar.org/paper/14fa10d06caa688f5e26e900f9cdbc29217b7996

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In Accounting

1. Erik Berglöf
2. Anete Pajuste
3. Iftekhar Hasan
4. K. Marton
5. Yiwei Fang
6. Allen N. Berger

In Strategy and Management

1. Erik Berglöf
2. Anete Pajuste
3. Iftekhar Hasan

Citations in the corpus

• The Value of Investor Protection: Firm Evidence from Cross-Border Mergers (2008, unknown): “Therefore, unless one has either episodic evidence (as in Glaeser et al., 2001, on the Poland—Czech Republic difference) or new indicators (as in Pistor, 2000, for transition economies; and Hyytinen et al., 2001, for Finland), it is not possible to conclude that improvements in investor protection…”
• Bankruptcy Around the World: Explanations of its Relative Use (2002, unknown): “…exogenously determined, we expect the implementation of laws to be a significant factor and therefore also include an index of the efficiency and integrity of the legal environment, RULE of LAW, as reported for most countries by La Porta et al. (1998) and for transition economies by Pistor (2000).”
• The standardization of law and its effect on developing economies (2002, unknown): “48 The various legal indicators used in this study and the variance of these indicators across different transition economies is discussed in Pistor (2000).”
• Law and Finance in Transition Economies (2000, unknown): “This seems to suggest a strong response by law-makers to the problems of weak shareholder protection, in some cases under foreign pressure and with foreign advice ( Pistor, 1999).”
• Portfolio preferences of foreign institutional investors (2003, unknown): “Our results also provide insights into the impact of firm-level policies on U.S. funds’ investment allocations.”
• What Do Firms Disclose and Why? Enforcing Corporate Governance and Transparency in Central and Eastern Europe (2005, background): “(Pistor, 2000) (‘anti-director index’ in La Porta et al.”
• Adopting Better Corporate Governance: Evidence from Cross-Border Mergers (2008, unknown): “…that improvements in investor protection within a country have positive e¤ects, unless there is episodic evidence (Glaeser et al., 2001, on the Poland–Czech Republic di¤erence), or new indicators are constructed (as in Pistor, 2006, for transition economies, and Hyytinen et al., 2003, for Finland).”
• Agency Conflicts, Ownership Concentration, and Legal Shareholder Protection (2006, unknown): “Weak legal protection can be due either to poor quality of th or to ineffective enforcement ( Pistor et al., 2000 ). We abstract from such differences a focus on the ultimate impact of the law. The law and finance literature documents that differences in legal protection are ciated with differences ”
• Institutional development and bank stability: Evidence from transition countries (2014, background): “In the early stage of a transition, legal systems in transition countries are all well below the world average (Pistor, 2000).”
• Corporate Governance and Control (2003, unknown): “The method was also applied in other countries, finding the owner-controlled firms significantly outperform manager-controlled firms in the UK [Radice (1971), Steer and Cable (1978), Cosh and Hughes (1989), Leech and Leahy (1991)], 156 profitability is higher with family control in France [Jacquemin”