Journal of Financial Economics Vol. 116 No. 3 2015
Do property rights matter? Evidence from a property law enactment
Abstract
This paper considers a property law enactment that gave creditors more rights over the assets underlying their secured loans to private firms and gave private firms more protections against the potential expropriation of their assets. We find that this property law enactment led to a significant increase in firm value. We also find that the law׳s impact on value was more profound for firms with more tangible assets, lower internal cash flows, and stronger growth opportunities, and less profound for politically connected firms. Taken together, our findings confirm the importance of property rights protection in enhancing firm value.
- DOI
- 10.1016/j.jfineco.2015.04.003
- Volume
- 116
- Issue
- 3
- Pages
- 583-593
- Language
- en
- Sources
- crossref bibtex:phds-export.bib openalex