The Law and Economics of Self-Dealing


Shleifer, Andrei, Simeon Djankov, Rafael LaPorta, and Florencio Lopez-de-Silanes. 2008. “The Law and Economics of Self-Dealing.” Journal of Financial Economics 88 (3): 430-465.
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We present a new measure of legal protection of minority shareholders against expropriation by corporate insiders: the anti-self-dealing index. Assembled with the help of Lex Mundi law firms, the index is calculated for 72 countries based on legal rules prevailing in 2003, and focuses on private enforcement mechanisms, such as disclosure, approval, and litigation, that govern a specific self-dealing transaction. This theoretically grounded index predicts a variety of stock market outcomes, and generally works better than the previously introduced index of anti-director rights.
Copyright 2008 Elsevier B.V. All rights reserved.

Last updated on 07/25/2012