Investor Protection and Equity Markets
Author | : Andrei Shleifer |
Publisher | : |
Total Pages | : 41 |
Release | : 2009 |
ISBN-10 | : OCLC:1290844616 |
ISBN-13 | : |
Rating | : 4/5 (16 Downloads) |
Download or read book Investor Protection and Equity Markets written by Andrei Shleifer and published by . This book was released on 2009 with total page 41 pages. Available in PDF, EPUB and Kindle. Book excerpt: We present a simple model of an entrepreneur going public in an environment with poor legal protection of outside shareholders. The model incorporates elements of Beckeracirc;not;quot;s (1968) acirc;not;Scrime and punishmentacirc;not;? framework into a corporate finance environment of Jensen and Meckling (1976). We examine the entrepreneuracirc;not;quot;s decision and the market equilibrium. The model is consistent with a number of empirical regularities concerning the relationship between investor protection and corporate finance. It also sheds light on the patterns of capital flows between rich and poor countries and on the politics of reform of investor protection.