Scandinavian Working Papers in Economics
HomeAboutSeriesSubject/JEL codesAdvanced Search
Bank of Finland Research Discussion Papers, Bank of Finland

No 1/2010:
Law and stock markets: evidence from an emerging market

Timo Korkeamäki, Elina Rainio and Tuomas Takalo ()

Abstract: A sweeping and protracted reform of corporate law took place in Finland in the 1970s. The reform brought significant improvements to investor protection and, similar to the US Sarbanes-Oxley Act, tightened disclosure rules at the cost of increasing the work load in corporate reporting. We find that the Finnish stock market generally reacts negatively to news of tightened disclosure rules and increased work loads, whereas news of delays in implementation of reform were largely positive. This raises the question of whether strengthening investor protection by requiring greater transparency necessarily promotes the development of financial markets. It also serves to remind that the implementation costs of reforms should not be overlooked.

Keywords: corporate governance; investor protection; law and finance; transparency; Sarbanes-Oxley Act; (follow links to similar papers)

JEL-Codes: G34; K22; (follow links to similar papers)

34 pages, January 10, 2010

Before downloading any of the electronic versions below you should read our statement on copyright.
Download GhostScript for viewing Postscript files and the Acrobat Reader for viewing and printing pdf files.

Full text versions of the paper:

1001netti.pdf    PDF-file
Download Statistics
This paper is published as:
Korkeamäki, Timo, Elina Rainio and Tuomas Takalo, (2013), 'Law and stock markets: evidence from an emerging market', Economics of Transition, Vol. 21, July, No. 3, pages 509-551

Questions (including download problems) about the papers in this series should be directed to Minna Nyman ()
Report other problems with accessing this service to Sune Karlsson () or Helena Lundin ().

Programing by
Design by Joachim Ekebom

Handle: RePEc:hhs:bofrdp:2010_001 This page was generated on 2014-12-14 19:21:36