University of Hertfordshire

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Original languageEnglish
Article number101065
JournalResearch in International Business and Finance
Early online date18 Jul 2019
DOIs
Publication statusE-pub ahead of print - 18 Jul 2019

Abstract

This paper empirically assesses if and to what extent cross-country differences in institutions inherited from the past affect current institutional quality in Africa. Specifically, the work evaluates if legal origins and disease endowments explain cross-country differences in the quality of contemporary institutions that are widely considered to be important for financial system development and other economic outcomes, such as those related to creditor rights protection and the credit information infrastructure, as well as the judicial, legal property and insolvency systems. Empirical tests are carried out on a sample of 46 African former European colonies with data on current institutional quality from 2004 to 2013. The findings reveal that the legal origins hypothesis receives strong support in the data: historical factors, rooted in legal origins, have long-lasting effects on current institutional quality in the African context. Mixed evidence is instead found for the endowment view.

Notes

© 2019 Elsevier B.V. This manuscript is made available under the terms of the Creative Commons Attribution-NonCommercial-NoDerivatives 4.0 International licence (CC BY-NC-ND 4.0). For further details please see: https://creativecommons.org/licenses/by-nc-nd/4.0/

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