The Paper analyses the political decision that determines the degree of investor protection. We show that entrepreneurs and workers can strike a political agreement by which low investor protection is exchanged for high employment protection. This ‘corporatist’ agreement is feasible if the...

I propose a model in which a stock exchange can improve its liquidity by tightening its listing requirements. Because these reduce information asymmetry, they increase the utility of investors and lead to a high investor participation on the exchange. However, the exchange never sets the highest...