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- Publisher Website: 10.1016/j.chieco.2003.09.016
- Scopus: eid_2-s2.0-0347192990
- WOS: WOS:000188613900009
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Article: Capital markets and legal development: The China case
Title | Capital markets and legal development: The China case |
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Authors | |
Keywords | Capital market development Economic development Law and finance Legal reform Product liability Shareholder rights |
Issue Date | 2003 |
Publisher | Elsevier BV. The Journal's web site is located at http://www.elsevier.com/locate/chieco |
Citation | China Economic Review, 2003, v. 14 n. 4, p. 451-472 How to Cite? |
Abstract | Recent research establishes a significant positive correlation between law and finance (and hence economic growth), restarting a debate on the 'law matters' thesis. However, which way the causality goes is still not clear. The purpose of this paper is to use the ongoing reform experience of China, especially its capital market experience, to examine the direction of causality. First, we show that China's recent experience is largely consistent with Coffee's [Yale Law Journal 111 (2001, October)] 'crash-then-law' interpretation of this correlation. Indeed, it is the large and clearly defined constituency of investors that has been a key driving force behind much of the recent legal progress. The rights and economic interests of this constituency have fundamentally challenged the traditional emphasis of the Chinese legal culture on administrative and criminal sanctions, but not on civil litigation law. Second, we compare the different contributions to legal change made by the stock market and the consumer product markets. We argue that capital markets are perhaps the most conducive to the formation of a politically powerful constituency and hence more aggressive legal change, because of (1) the higher degree of commonality among interested parties and (2) immediately measurable and tangible damages. These two characteristics not only allow investors to identify with each other more easily, but also create an ideal basis for more debate in the media, which in turn promotes the development of a legal culture. © 2003 Elsevier Inc.All rights reserved. |
Persistent Identifier | http://hdl.handle.net/10722/222289 |
ISSN | 2023 Impact Factor: 5.2 2023 SCImago Journal Rankings: 1.732 |
ISI Accession Number ID |
DC Field | Value | Language |
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dc.contributor.author | Chen, Z | - |
dc.date.accessioned | 2016-01-11T06:29:31Z | - |
dc.date.available | 2016-01-11T06:29:31Z | - |
dc.date.issued | 2003 | - |
dc.identifier.citation | China Economic Review, 2003, v. 14 n. 4, p. 451-472 | - |
dc.identifier.issn | 1043-951X | - |
dc.identifier.uri | http://hdl.handle.net/10722/222289 | - |
dc.description.abstract | Recent research establishes a significant positive correlation between law and finance (and hence economic growth), restarting a debate on the 'law matters' thesis. However, which way the causality goes is still not clear. The purpose of this paper is to use the ongoing reform experience of China, especially its capital market experience, to examine the direction of causality. First, we show that China's recent experience is largely consistent with Coffee's [Yale Law Journal 111 (2001, October)] 'crash-then-law' interpretation of this correlation. Indeed, it is the large and clearly defined constituency of investors that has been a key driving force behind much of the recent legal progress. The rights and economic interests of this constituency have fundamentally challenged the traditional emphasis of the Chinese legal culture on administrative and criminal sanctions, but not on civil litigation law. Second, we compare the different contributions to legal change made by the stock market and the consumer product markets. We argue that capital markets are perhaps the most conducive to the formation of a politically powerful constituency and hence more aggressive legal change, because of (1) the higher degree of commonality among interested parties and (2) immediately measurable and tangible damages. These two characteristics not only allow investors to identify with each other more easily, but also create an ideal basis for more debate in the media, which in turn promotes the development of a legal culture. © 2003 Elsevier Inc.All rights reserved. | - |
dc.language | eng | - |
dc.publisher | Elsevier BV. The Journal's web site is located at http://www.elsevier.com/locate/chieco | - |
dc.relation.ispartof | China Economic Review | - |
dc.subject | Capital market development | - |
dc.subject | Economic development | - |
dc.subject | Law and finance | - |
dc.subject | Legal reform | - |
dc.subject | Product liability | - |
dc.subject | Shareholder rights | - |
dc.title | Capital markets and legal development: The China case | - |
dc.type | Article | - |
dc.identifier.email | Chen, Z: zchen99@hku.hk | - |
dc.identifier.authority | Chen, Z=rp02041 | - |
dc.identifier.doi | 10.1016/j.chieco.2003.09.016 | - |
dc.identifier.scopus | eid_2-s2.0-0347192990 | - |
dc.identifier.volume | 14 | - |
dc.identifier.issue | 4 | - |
dc.identifier.spage | 451 | - |
dc.identifier.epage | 472 | - |
dc.identifier.isi | WOS:000188613900009 | - |
dc.publisher.place | Netherlands | - |
dc.identifier.issnl | 1043-951X | - |