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Legal origin and financial development: a propensity score matching analysis

Legal origin and financial development: a propensity score matching analysis
Legal origin and financial development: a propensity score matching analysis

We revisit the impact of legal origin on financial development using propensity score matching and a new financial development index on a sample of 178 countries over 1980–2016. German civil law countries are found to have the strongest positive impact on financial development. English common law countries follow. French and Scandinavian civil law countries have a negative impact on financial development while Socialist legal origin records no significant effect. When decomposing the measure of financial development into financial markets and financial institutions' development, we find that German civil law promotes both while English common law promotes only financial institutions development.

financial development, financial institutions, financial markets, legal origin, propensity score matching
1076-9307
De Vita, Glauco
002fc6bf-e5ed-4a13-8993-0ce5e1fc2005
Li, Chengchun
0ee7a126-be5b-4b56-81f4-5dc2d5b2b1c0
Luo, Yun
2ac0f228-573d-43e7-b309-1529b6f3d174
De Vita, Glauco
002fc6bf-e5ed-4a13-8993-0ce5e1fc2005
Li, Chengchun
0ee7a126-be5b-4b56-81f4-5dc2d5b2b1c0
Luo, Yun
2ac0f228-573d-43e7-b309-1529b6f3d174

De Vita, Glauco, Li, Chengchun and Luo, Yun (2020) Legal origin and financial development: a propensity score matching analysis. International Journal of Finance & Economics. (doi:10.1002/ijfe.2167).

Record type: Article

Abstract

We revisit the impact of legal origin on financial development using propensity score matching and a new financial development index on a sample of 178 countries over 1980–2016. German civil law countries are found to have the strongest positive impact on financial development. English common law countries follow. French and Scandinavian civil law countries have a negative impact on financial development while Socialist legal origin records no significant effect. When decomposing the measure of financial development into financial markets and financial institutions' development, we find that German civil law promotes both while English common law promotes only financial institutions development.

Text
FINAL REVISED LEGAL ORIGIN PAPER FD PSM PAPER for IJFE 30 June2020 - Accepted Manuscript
Available under License University of Southampton Accepted Manuscript Licence.
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More information

Accepted/In Press date: 30 June 2020
e-pub ahead of print date: 9 October 2020
Additional Information: Publisher Copyright: © 2020 John Wiley & Sons, Ltd.
Keywords: financial development, financial institutions, financial markets, legal origin, propensity score matching

Identifiers

Local EPrints ID: 442553
URI: http://eprints.soton.ac.uk/id/eprint/442553
DOI: doi:10.1002/ijfe.2167
ISSN: 1076-9307
PURE UUID: cb0c9e4b-3942-42a0-8089-2d10a4eeb4a2
ORCID for Yun Luo: ORCID iD orcid.org/0000-0001-8409-366X

Catalogue record

Date deposited: 17 Jul 2020 16:36
Last modified: 17 Mar 2024 05:43

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Contributors

Author: Glauco De Vita
Author: Chengchun Li
Author: Yun Luo ORCID iD

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