Financial Development and the Evolution of Property Rights and Legal Institutions

46 Pages Posted: 2 Aug 2014

See all articles by Mihail K. Miletkov

Mihail K. Miletkov

University of New Hampshire - Paul College of Business and Economics

M. Babajide Wintoki

University of Kansas - School of Business

Date Written: August 28, 2012

Abstract

Using a panel of 129 countries over the period from 1965 to 2008, we examine the role of financial development in the evolution of property rights and legal institutions. We postulate that changes in the level of financial development change the costs and benefits of, and the demand for property rights institutions. We predict, and find, a positive causal relationship between the level of financial development and the subsequent quality of property rights institutions, even after we control for country level heterogeneity and reverse causality. Furthermore, our analysis suggests that this relationship is especially strong in emerging market countries.

Keywords: property rights, institutions, financial intermediaries, economic development

JEL Classification: F30, N20, O43

Suggested Citation

Miletkov, Mihail K. and Wintoki, Modupe Babajide, Financial Development and the Evolution of Property Rights and Legal Institutions (August 28, 2012). Emerging Markets Review, Forthcoming, Available at SSRN: https://ssrn.com/abstract=2474663

Mihail K. Miletkov (Contact Author)

University of New Hampshire - Paul College of Business and Economics ( email )

10 Garrison Ave
Durham, NH 03824
United States

Modupe Babajide Wintoki

University of Kansas - School of Business ( email )

1300 Sunnyside Avenue
Lawrence, KS 66045
United States

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