Recent finance scholarship finds that countries with legal systems based on the common law provide better investor protections and have more developed financial markets than civil law countries. These findings echo Hayek's claims of the superiority of English to French legal institutions. In...

Recent finance scholarship finds that countries with legal systems based on the common law provide better investor protections and have more developed financial markets than civil law countries. These findings echo Hayek's claims of the superiority of English to French legal institutions. In...

We analyze the relationship between legal institutions, innovation and growth. We compare a rigid (law set ex-ante) legal system and a flexible one (law set after observing current technology). The flexible system dominates in terms of welfare, amount of innovation and output growth at...