Taxonomies and Leximetrics

Taxonomies are frequently used in the literature of corporate law and governance. This chapter outlines four types of typologies: limited typologies that may either focus on legal or non-legal questions, and general typologies that may either have a legal or a non-legal focus. Subsequently, it discusses challenges to these taxonomies, in particular the severe criticism directed against the quantitative research on “legal origins”. This is not meant to reject the possibility of quantifying legal differences. Indeed, the subsequent section presents how such “leximetric” tools can contribute to the question of whether or not there are distinct legal families in corporate law. This is illustrated through a cluster analysis of investor protection data of the World Bank's Doing Business Report. The findings confirm the skepticism of this chapter about broad taxonomies