Powerpoint slides of Group 1

Powerpoint slides of Group 1 - Law & Finance R. La Porta, F.

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R. La Porta, F. Lopez-de-Silanes, and R. Vishny Corporate Financial Management (AF5331) Group 1 Nelson Chan Peter Chan Nance Fung Ada Chan Collin Yip 5 October 2005
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Outlines I. Overview of the issues Nelson II. Countries, legal families and legal rules Peter III. Compare shareholder’s rights Nance IV. Compare creditor’s rights Ada V. Nelson accounting standards VI. Ownerships Collin VII. Conclusion Collin
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I. Overview of the Issues
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Objective of the Study Law and the quality of its enforcement are important determinants of what rights investors have and how well these rights are protected Determine investors’ readiness to finance the firms Thus, differences in legal protections of investors might help to explain why firms are financed and owned so differently in different countries
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Methodology Examine empirically how legal rules governing protection of corporate shareholders and creditors How the quality of enforcement of these laws varies Whether these variations matter for corporate ownership concentration 49 countries in different legal origin Common-law countries Vs German-civil-law & Scandinavian countries Vs French-civil-law countries
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Contribution of the Study Studied 49 countries with different languages and traditions Successfully identified and quantified the relationship between legal origin and protection of investors & thus corporate financing Numbering the qualities of investor protection & enforcement
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lI. Countries, Legal Families, and Legal Rules
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Countries How investor rights are protected? The 3 wealthy economies with effective corporate governance are the United States, Germany and Japan WorldScope sample of 15,900 firms from 33 countries Moody’s International sample of 15,100 non-U.S. firms from 92 countries
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Countries (cont’d) A comprehensive sample of 49 countries - at least five domestic non-financial publicly traded firm with no government ownership in 1993 No socialist or “transition” economies in the sample
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Legal Families Criteria used to define major families of law historical background of the legal system the working methodology of jurists characteristics of legal concept employed the legal institutions of the system & divisions of law employed within a system
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Legal Families (cont’d) Two broad legal traditions is identified Civil Law The French Commercial Code The German Commercial Code The Scandinavian Family Common Law The Law of England / English Law
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Legal Families – Civil Law The Civil or Romano-Germanic legal tradition is the oldest, the most influential and the most widely distributed around the world. It originates from Roman law, uses statutes as a primary means of legal material, relies heavily on legal scholars to ascertain and formulates its rules.
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Legal Families – Civil Law (cont’d) The French Commercial Code was written
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This note was uploaded on 07/30/2011 for the course FINANCE 101 taught by Professor Xxx during the Spring '11 term at HKU.

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Powerpoint slides of Group 1 - Law & Finance R. La Porta, F.

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