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Journal of Financial Economics Vol. 88 No. 3 2008

The law and economics of self-dealing

Simeon Djankov1,2,3,4; Rafael La Porta; Florencio López‐de‐Silanes; Andrei Shleifer5

1 Dartmouth College · 2 Harvard University Press · 3 Dana-Farber/Harvard Cancer Center · 4 University of Amsterdam · 5 Harvard University

open access

Abstract

We present a new measure of legal protection of minority shareholders against expropriation by corporate insiders: the anti-self-dealing index. Assembled with the help of Lex Mundi law firms, the index is calculated for 72 countries based on legal rules prevailing in 2003, and focuses on private enforcement mechanisms, such as disclosure, approval, and litigation, that govern a specific self-dealing transaction. This theoretically grounded index predicts a variety of stock market outcomes, and generally works better than the previously introduced index of anti-director rights.

DOI
10.1016/j.jfineco.2007.02.007
Volume
88
Issue
3
Pages
430-465
Language
en
Sources
bibtex:phds-export.bib openalex crossref

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