Although twenty years have elapsed since the beginning of transition, Eastern European and Central Asian countries are still characterized by remarkably heterogeneous levels of economic development. In the light of the established causal relationship between finance and growth, we perform an...

This paper offers the first comprehensive analysis of legal change in the protection of shareholder and creditor rights in transition economies and its impact on the propensity of firms to raise external finance. Following La Porta et al. (1998), the paper constructs an expanded set of legal...