ABSTRACT
RECENT RESEARCH ON CORPORATE GOVERNANCE around the world has established a number of empirical regularities. Such diverse elements of countries’ financial systems as the breadth and depth of their capital markets, the pace of new security issues, corporate ownership structures, dividend policies, and the efficiency of investment allocation appear to be explained both conceptually and empirically by how well the laws in these countries protect outside investors. According to this research, the protection of shareholders and creditors by the legal system is central to understanding the patterns of corporate finance in different countries.
