Legal traditions and initial endowments in shaping the path of financial development

Daniel Oto-Peralías, Diego Romero-Ávila

Research output: Contribution to journalArticlepeer-review

11 Citations (Scopus)

Abstract

This paper finds remarkable heterogeneity in the relationship between legal traditions and finance in former colonies. The effect of the British common law on financial development is conditioned by the level of initial endowments. In former colonies with low precolonial population density, the common law has promoted high financial development, but where endowments were abundant, this legal tradition has not worked well. In contrast, the effect of the French civil law on finance is invariant to endowments. British common law countries do not exhibit greater financial development levels than French civil law countries when endowments are sufficiently high.
Original languageEnglish
Pages (from-to)43–77
Number of pages35
JournalJournal of Money, Credit and Banking
Volume46
Issue number1
Early online date20 Jan 2014
DOIs
Publication statusPublished - Feb 2014

Keywords

  • Financial development
  • Legal origin
  • Endowments
  • Colonialism

Fingerprint

Dive into the research topics of 'Legal traditions and initial endowments in shaping the path of financial development'. Together they form a unique fingerprint.

Cite this