This paper offers the first comprehensive analysis of legal change in the protection of shareholder and creditor rights in transition economies and its impact on the propensity of firms to raise external finance. Following La Porta et al. (1998), the paper constructs an expanded set of legal...

We analyze the determinants of effective legal institutions (legality) using data from 49 countries. We show<p> that the way the law was initially transplanted and received is a more important determinant than the supply<p> of law from a particular legal family. Countries that have developed legal...</p></p>