In the last dozen years, economists have produced a considerable body of research suggesting that the historical origin of a country’s laws is highly correlated with a broad range of its legal rules and regulations, as well as with economic outcomes. Much of this research has dealt with rules...

We present a model of the effects of legal protection of minority shareholders and of cash flow ownership by a controlling shareholder on the valuation of firms. We then test this model using a sample of 371 large firms from 27 wealthy economies. Consistent with the model, we find evidence of...

We present a simple model of an entrepreneur going public in an environement with poor legal protection of outside shareholders. The model incorporates elements of Becker's (1968) quot;crime and punishmentquot; framework into a corporate finance environment of Jensen and Meckling (1976). We...