Legal Features of Traded Shares and Stock Price Volatility

This study examined corporate shares' laws related to stock market stability in twenty-five countries that covering developed and emerging economies, civil and common laws, and all geographic regions of the world, including South and Northern America, East, and West Europe, South Asia, Australia, and Middle East countries. This study concluded that there are significant changes in corporate laws implemented in the last two decades especially those related to harmonization of corporate governance principles, best practices, and code of conducts concerning stock trading. On the other hand, there are still significant diversities excising between types of shares traded in the world stock markets, which have direct impact on trading stability. The types, classes, and features of shares traded in the world stock markets are vary to a great extent, not only among corporate laws, but also between an individual corporations bylaws. Finally, the type of shares which may have a negative aspects during irrational trading periods, still exist and introduced recently to new markets, such as bearer shares, dual class share, inferior voting shares and no-par value shares