TY - JOUR
T1 - Legal origin, financial development, and innovation: evidence from large public and private firms in the U.S. and Europe
AU - Caprio, Lorenzo
AU - Rigamonti, Silvia
AU - Signori, Andrea
PY - 2020
Y1 - 2020
N2 - This paper investigates the interplay between legal origin, financial market development, and the growth and innovation patterns of the population of large firms in U.S. and Europe. We document that common law countries (namely U.S., U.K., and Ireland) are characterized by a higher degree of stock market development and an increased propensity of firms to be publicly traded relative to Continental Europe. We also find that firms based in common law countries are more innovative, consistent with the view that market-based systems are more capable of financing intangible assets than bank-based systems. Also, these systems are effective at accelerating firm growth, as large firms in common law countries are sensibly younger and went public earlier than their Continental European peers, and this is particularly true for innovative firms.
AB - This paper investigates the interplay between legal origin, financial market development, and the growth and innovation patterns of the population of large firms in U.S. and Europe. We document that common law countries (namely U.S., U.K., and Ireland) are characterized by a higher degree of stock market development and an increased propensity of firms to be publicly traded relative to Continental Europe. We also find that firms based in common law countries are more innovative, consistent with the view that market-based systems are more capable of financing intangible assets than bank-based systems. Also, these systems are effective at accelerating firm growth, as large firms in common law countries are sensibly younger and went public earlier than their Continental European peers, and this is particularly true for innovative firms.
KW - Financial development
KW - Innovation
KW - Legal origin
KW - Listing status
KW - Financial development
KW - Innovation
KW - Legal origin
KW - Listing status
UR - https://publicatt.unicatt.it/handle/10807/148141
UR - https://www.scopus.com/inward/citedby.uri?partnerID=HzOxMe3b&scp=85077685812&origin=inward
UR - https://www.scopus.com/inward/record.uri?partnerID=HzOxMe3b&scp=85077685812&origin=inward
U2 - 10.1007/s10997-019-09500-1
DO - 10.1007/s10997-019-09500-1
M3 - Article
SN - 1385-3457
VL - 2020
SP - 905
EP - 925
JO - THE JOURNAL OF MANAGEMENT AND GOVERNANCE
JF - THE JOURNAL OF MANAGEMENT AND GOVERNANCE
IS - 24
ER -