Disappearing Paradigms in Shareholder Protection: Leximetric Evidence for 30 Countries, 1990-2013

Abstract

Creative Commons Attribution License (http://creativecommons.org/licenses/by/4.0/), which permits unrestricted use, distribution, and reproduction in any medium, provided the original work is properly cited.Additional information: Use policyThe full-text may be used and/or reproduced, and given to third parties in any format or medium, without prior permission or charge, for personal research or study, educational, or not-for-prot purposes provided that:• a full bibliographic reference is made to the original source • a link is made to the metadata record in DRO • the full-text is not changed in any way The full-text must not be sold in any format or medium without the formal permission of the copyright holders.Please consult the full DRO policy for further details. This working paper forms part of the CBR Research Programme on Corporate Governance AbstractScholars frequently claim that path dependency of the law, the influence of the US model of corporate governance, and the role of legal origin and the stage of legal development are key for a comparative understanding of shareholder protection. This article, however, suggests that these paradigms of comparative company law gradually seem to disappear. The basis for our assessment is an original leximetric dataset that measures the development of shareholder protection for 30 countries over the last 24 years. Using tools of descriptive statistics, time series and cluster analysis, our main findings are that all legal origins have now in average about the same level of shareholder protection, that paternalistic tools have overtaken enabling tools of protection, and that after the global financial crisis this area has become a less frequent object of law reforms.

The regulation of illegal fundraising in China

“…Indeed, China is regarded as a top performer in shareholder protection, performing even better than the UK and the US. 178 This should give a good degree of confidence to equity investors. On the other hand, creditor protection can be understood in two aspects: contractual and proprietary.…”

Is There a Relationship Between Shareholder Protection and Stock Market Development?

“…Mandatory bid Equals 1 if there is a mandatory public bid for the entirety of shares in case of purchase of 30% or 1/3 of the shares; equals 0.5 if the mandatory bid is triggered at a higher percentage (such as 40 or 50 %); further, it equals 0.5 if there is a mandatory bid but the bidder is only required to buy part of the shares; equals 0 if there is no mandatory bid at all. The ten indicators represent our best assessment of the core legal and regulatory elements of shareholder protection regimes across developed and developing countries in the closing years of the last century and the first decades of the present one (for further detail, see Siems, 2008a;Armour et al, 2009a;Buchanan et al, 2014;Katelouzou and Siems, 2015;Siems, 2016). The relevance and usefulness of CBR dataset have been acknowledged in the World Bank's Doing Business Report (World Bank 2015: 106-8), which has incorporated some of the variables from the CBR index into its own "Protecting Minority Shareholders" index, and there is a growing body of work applying the CBR dataset and related data sources in econometric analysis (Armour et al, 2009a;Van der Elst, 2010;Deakin et al, 2012;Belloc, 2013;Guillén and Capron, 2016).…”

“…This result can be interpreted as evidence of managers de-listing firms in response to laws and regulations empowering shareholders (see Armour et al, 2009a). It can also be read as implying that increases in shareholder rights have a nonlinear relationship with corporate governance outcomes; beyond a certain point, empowering shareholders no longer generates gains in terms of reduced agency costs, but adds to the costs of regulatory compliance and inhibits effective management (Deakin et al, 2012;Katelouzou and Siems, 2015).…”

Contested takeovers of family firms and socioemotional wealth: a case study

“…There is a right to appeal against a decision of a shareholders' meeting if it is deemed to violate the company's charter. These protections afforded to minority shareholders in Poland are commonplace in other countries and should be seen against a backdrop of improved shareholder protection across countries since 1990 irrespective of legal origin and stage of legal development (Katelouzou and Siems, 2015). (Bogen and Grześkowiak, 2010).…”