2nd March 2009:
Product Market Competition, Corporate Governance and Legal Origin: Theoretical and Empirical Contribution
Dominic Chai, Simon Deakin, Prabirjit Sarkar and Ajit Singh

Using the persistence of firm-level profits as a measure of the intensity of product market competition in a panel of 2,303 manufacturing firms from 19 countries for the period 1995-2005, we find that civil law systems have product markets which are more competitive (in this sense) than common law ones, and that the intensity of competition is no greater in developed economies than in emerging ones. We find a positive relationship between shareholder protection and the persistence of profits in civil law countries and a negative relationship in the common law countries Thus the product market may be an important 'missing link' in explaining how legal origin impacts on the economy.

The seminar took place from 12h00 until 1p.m. at the Judge Business School (Room W2.02).