On the Insignificance and/or Endogeneity of La Porta et al.'s 'Anti-Director Rights Index' under Consistent Coding

Common Law vs. Civil Law: Which System Provides More Protection to Shareholders and Creditors and Promotes Financial Development

“…The works of La Porta, Lopez-de-Silanes, Shleifer and Vishny (henceforth, 'LLSV ', 1997, 1998) and the subsequent works by them and their followers (see La Porta et al, 1999Porta et al, , 20002006, 2008Djankov et al, 2003;Shleifer, 2002, 2003;Beck et al, 2003aBeck et al, , 2003bBotero et al, 2004) infused a strong 'leximetric' flavour to this 'endowment perspective' of law. La Porta and his collaborators and followers used (by and large) binary variables (0, 1) to quantify the quality of various types of law existing in a large number of countries protecting the interests of the their shareholders, creditors and labourers (these are what we call 'leximetric' data).…”

Corporate Governance of Banks: The Current State of the Debate

“…In the light of the empirical results of this last group of authors and in spite of the possible limitations of their analysis (Spamann 2006), in the near future, the multilateral regulatory debate might consider whether and to what extent there is scope for any banking regulation which does not rely on pure market mechanisms.…”

“…This index ranges from zero to six, where larger values indicate greater legal protection of shareholder rights. Spamann (2006) states that the LLSV (1998) Antidirector Rights Index (ADRI) is unlikely to be a valid measure of shareholder protection, he re-codes the Index and shows that non-recoded ADRI was systematically incorrectly measured. Spamann says that "the numerous empirical studies of the last 10 years that have used the non-recoded ADRI as a measure of investor protection may have obtained erroneous results, and may have to be revisited".…”

Comparative Law and Finance: Past, Present and Future Research

“…697-736]). SPAMANN [2006] and [2008] even re-coded the entire shareholder protection index with the result that most of the claimed effects disappeared. In the light of this finding, even some of the original authors of the studies accepted that this index was not entirely robust (DJANKOV et al [2008]).…”