Journal of Financial Economics Vol. 70 No. 3 2003
Culture, openness, and finance
Abstract
Differences in culture, proxied by differences in religion and language, cannot be ignored when examining why investor protection differs across countries. We show that a country's principal religion predicts the cross-sectional variation in creditor rights better than a country's natural openness to international trade, its language, its income per capita, or the origin of its legal system. Catholic countries protect the rights of creditors less well than Protestant countries. A country's natural openness to international trade mitigates the influence of religion on creditor rights. Culture proxies are also helpful in understanding how investor rights are enforced across countries.
- DOI
- 10.1016/s0304-405x(03)00173-9
- Volume
- 70
- Issue
- 3
- Pages
- 313-349
- Language
- en
- Sources
- crossref bibtex:phds-export.bib openalex