No full-text available
To read the full-text of this research,
you can request a copy directly from the author.
The Legal Origins Theory in Crisis
Abstract
The Legal Origins Theory purports to predict how countries respond to economic and social problems. Specifically, the legal origins of the United States should strongly influence the manner it approaches economic problems and its approach should be distinct from the response of civil law countries. If the theory is accurate, America's legal tradition should have a profound impact on its response to the crisis. This Article seeks to test the boundaries of the theory by assessing whether it could have predicted the manner the U.S. responded to the current economic crisis. After analyzing the U.S. response to the crisis, this article reveals that such response runs fundamentally counter to its legal origins. This inconsistency suggests that political, social, and economic forces do more to explain the U.S. response to significant turmoil than its legal origins. It also suggests that the current crisis may have been so severe that it overwhelmed any explanatory or predictive value potentially derived from the legal origins theory.
... Nevertheless, Islamic banks as corporations create a poverty alleviation contribution through entrepreneurship construction, corporate social responsivity, and charity integration [32,33]. In relation to the importance of examining the legal origin's influence on the relationship between bank performance and poverty reduction, we based our analysis on Legal Origin theory, [34]. This idea asserts that a nation's legal traditions and institutions substantially impact several facets of its economic and financial progress, [30,34,35]. ...
... In relation to the importance of examining the legal origin's influence on the relationship between bank performance and poverty reduction, we based our analysis on Legal Origin theory, [34]. This idea asserts that a nation's legal traditions and institutions substantially impact several facets of its economic and financial progress, [30,34,35]. Legal scholars frequently categorize legal traditions based on their historical origins, with two notable classifications being the Common Law tradition and the Civil Law tradition, [34,36]. ...
... This idea asserts that a nation's legal traditions and institutions substantially impact several facets of its economic and financial progress, [30,34,35]. Legal scholars frequently categorize legal traditions based on their historical origins, with two notable classifications being the Common Law tradition and the Civil Law tradition, [34,36]. ...
The present study addresses a significant omission in the literature by examining the role of non-traditional financial organizations in poverty reduction. Previous research has primarily focused on the direct impact of commercial banks on poverty, neglecting the contribution of other types of financial institutions. This research posited that Islamic banks are anticipated to assume a pivotal function in mitigating poverty; nonetheless, more studies on the topic need to be conducted. This research used the Partial Least Squares Regression technique to investigate the impact of Islamic banks on poverty alleviation in several developing nations from 2013 to 2019. The empirical data demonstrates a direct correlation between the overall assets of Islamic banks and some evident characteristics. The heightened acquisition of holdings by Islamic banks indicates a decrease in poverty. Furthermore, a statistically significant correlation exists between the legal framework and poverty alleviation. It is crucial to acknowledge that the research is limited by the intrinsic limits imposed by the accessible information on Islamic banks and the specific temporal limitations of the study. Future academic research should aim to increase the sample size and cultural and social factors and expand the time frame to understand the intricate function of Islamic banks in reducing poverty entirely. This paper is helpful to many policymakers in developing countries, including Hail development plans in Saudi Arabia.
... In the study, the researcher presented evidence which aimed at gaining an understanding of variables that may have affected home purchase prices preceding the Global Financial Crisis of 2007 and 2008. The Global Financial Crisis of 2007 and 2008 was described in the literature, as the greatest economic event since the Great Depression (Adebambo, Brockman, & Yan, 2015;Fairfax 2009;Ökte, 2012;Thakor, 2015). The financial crisis which many in the literature have suggestedwas caused by the rapid increase in home purchase prices in the United States, causing the collapse of the subprime mortgage industry. ...
... Many in the literaturepointed to subprime loan borrowers with little or no down payment, for home purchases as a factor which caused home purchase price in the United States real estate market to rapidly increase over historical levels. The literature noted a real estate bubble resulting from the rapid increase in home purchase price, leading to a real estate crash that caused the Global Financial Crisis of 2007 and 2008 (Fairfax, 2009;Schmudde, 2009). As a result of the questions raised in the research of Walters (2018) and questions raised by Khayoyan (2012), the Eddison Walters Risk Expectation Theory of the Global Financial Crisis of 2007 and 2008 suggested a more likely explanation for the cause of the financial crisis. ...
... To provide context, the researcher presented the problem, chronicled the events of the Global Financial (Adebambo et. al, 2015;Fairfax 2009;Ökte, 2012;Thakor, 2015). The literature noted, the financial crisis that started in the United States subprime mortgage industry quickly spread around the world, causing capital markets throughout the world to become frozen, threatening to collapse the entire global economy, leading to an economic downturn around the world. ...
... In the study, the researcher presented evidence which aimed at gaining an understanding of variables that may have affected home purchase prices preceding the Global Financial Crisis of 2007 and 2008. The Global Financial Crisis of 2007 and 2008 was described in the literature, as the greatest economic event since the Great Depression (Adebambo, Brockman, & Yan, 2015;Fairfax 2009;Ökte, 2012;Thakor, 2015). The financial crisis which many in the literature have suggested was caused by the rapid increase in home purchase prices in the United States, causing the collapse of the subprime mortgage industry. ...
... Many in the literature pointed to subprime loan borrowers with little or no down payment, for home purchases as a factor which caused home purchase price in the United States real estate market to rapidly increase over historical levels. The literature noted a real estate bubble resulting from the rapid increase in home purchase price, leading to a real estate crash that caused the Global Financial Crisis of 2007 and 2008 (Fairfax, 2009;Schmudde, 2009). As a result of the questions raised in the research of Walters (2018) and questions raised by Khayoyan (2012), the Eddison Walters Risk Expectation Theory of the Global Financial Crisis of 2007 and 2008 suggested a more likely explanation for the cause of the financial crisis. ...
... To provide context, the researcher presented the problem, chronicled the events of the Global Financial (Adebambo et. al, 2015;Fairfax 2009;Ökte, 2012;Thakor, 2015). The literature noted, the financial crisis that started in the United States subprime mortgage industry quickly spread around the world, causing capital markets throughout the world to become frozen, threatening to collapse the entire global economy, leading to an economic downturn around the world. ...
Eddison Walters Risk Expectation Theory of The Global Financial Crisis of 2007 and 2008 presented the idea, advancement in technology was the cause of a significant increase in home purchase price preceding the Global Financial Crisis of 2007 and 2008. Economist lack of understanding of the impact of advancement in technology on real estate price, led to false information being feed in the financial market. The theory also suggested, no financial or real estate bubble existed in the United States real estate market preceding the Global Financial Crisis of 2007 and 2008. Eddison Walters Risk Expectation Theory of The Global Financial Crisis of 2007 and 2008 suggested, and abundance of media coverage of speculation based on false information of a real estate bubble, along with an abundance of media coverage of economist predicting a real estate crash, increased risk expectation significantly in the United States financial market. The increased risk expectation cause lending to stop. For financial markets to function, investors must be willing to accept a certain level of risk. When investors have no tolerance for risk, financial markets will not function. Therefore, the media coverage of speculation of a real estate bubble and an impending real estate crash can be blamed for causing the real estate crash in the United States, leading to the Global Financial Crisis of 2007 and 2008.
... Legal origin theory enquires into the historical trajectory by which a country's laws and legal institutions have been developed (Mahy, 2012). The theory posits that legal traditions of the 'origin' country transfer to the 'transplant' country as a result of colonisation or conquest (Fairfax, 2009). Legal traditions effectively characterise origin and transplant countries into legal families, with common law and civil law being the most dominant (Glaeser and Shleifer, 2002). ...
... Common law represents the law of England and is made up of judicial precedents broadening over time, whereas civil law, being the oldest and most widely distributed, is primarily based on the French civil law tradition governed by doctrines developed by legal scholars (Glaeser and Shleifer, 2002). A country's legal family is said to influence not only its laws and legal institutions but also how they respond to economic, political and social challenges (Fairfax, 2009). ...
This study uses legal origin theory to consider the influence of the British imperial government on financial statement presentation of early Western Australian banks. Accountability and patterns of financial presentation were explored through an examination of 192 quarterly returns and three annual returns for the Bank of Western Australia, Western Australian Bank and National Bank of Australia over the years 1837–1880. Findings from the study suggest the banks demonstrated a willingness to prepare forms of Western-narrow and Western-broad accounts. Early Western Australian banks consistently prepared timely financial statements to keep stakeholders informed of the banks’ quarterly returns. Despite the harsh economic conditions, Western Australian banks appeared to keep pace with the changing legal, political and fiscal accountability reforms carried out by the colonial government during this early settlement period of Western Australia.
... Walters (2018) presented evidence which challenges widely accepted theories of the cause of the Global Financial Crisis of 2007 and 2008 in the body of literature. The Global Financial Crisis of 2007 through 2008, described as the most significant economic event since the Great Depression (Adebambo, Brockman, & Yan, 2015;Fairfax 2009;Ökte, 2012;Thakor, 2015). Literature noted, the financial crisis which started in the United States subprime mortgage industry quickly spread around the world, causing capital markets across the globe to become frozen, threatening to collapse the entire global economy (Adebambo et. ...
No Real Estate Bubble Preceding Global Financial Crisis: Eddison Walters Risk
Expectation Theory of the Global Financial Crisis of 2007 and 2008
The relation between the post-merger performance and corporate governance mechanism is examined using Linear regression model for a sample of US, Canada, EU-28 and Western European countries listed firms for the period from 2003 to 2012. We also examine as to whether the use of International Financial Reporting Standards (IFRS) improves corporate transparency, therefore, increasing financial reporting quality. Using a sample of banks from international countries, we present the following key findings: post-merger performance is significantly better common law in countries than code law in countries with better IFRS group banks during the post-merger performance. We also find that local GAAP reporting allows a more transparent assessment of financial performance on the basis of traditional indicators making it a superior tool for assessing potential acquisition targets. This study analysis changes in a country legal regulation as a measure of corporate governance and shows that these regulations play an important role in merger activity. Legal origins and owner-protection mechanisms are important in explaining the relationship between the quality of accounting standards and corporate governance practices following IFRS adoption. Overall, our empirical findings result consistent with Ciobanu (2015) find that merger and acquisition is influenced both the legal origin and accounting regulations.
The article gives a brief description of the economic approach to the analysis of law and institutional design, are determined by the relevant applications of the methods and results of economic analysis of law in the creation of normative-legal acts.
Resumen: sobre la base de una democracia " eco-sistémica " que busca conservar la bio-diversidad a través del reconocimiento de la co-evolución entre naturaleza y cultura, el Constitucionalismo andino se presenta como la expresión de un constitucionalismo contra-he-gemónico, en su apuesta por la construcción, mediante nuevos mecanismos participativos e interculturales, de una nueva institucionali-dad que retoma la fórmula de la " hipótesis de Gaia " y legitima un verdadero y real " contrato social " con la naturaleza, identificando a ésta, no como un " objeto " de apropiación, explota-ción, o conservación, sino como " sujeto " jurí-dico y fuente primaria de la sociedad misma y a la Constitución como su " norma jurídica de garantía ".
Abstract: based on an " eco-systemic " democracy that seeks to preserve biodiversity through the recognition of the co-evolutionary link between nature and culture, the Andean Constitutionalism emerges as the expression of a counter-hegemonic constitutionalism committed to the construction of a new institutional framework through the inclusion of new participatory and intercultural mechanisms. Departing from western constitutional paradigms, this groundbreaking constitutionalism revisits the " Gaia hypothesis " and legitimizes a real " social contract " among the people and nature , and instead of considering it as an " object " of ownership, exploitation, or conservation, it regards nature as a legal " subject " and primary source of society itself and the Constitution as its " legal grantor and protector " .
Laws and regulations touch nearly every aspect of our lives. Most states require children to wear a helmet when riding a bicycle. The US Department of Agriculture requires that your “cheese pizza” contain no more than 11% of a cheese substitute. Food containing more than one ingredient can be labeled “organic” only if at least 95% of its contents are organic. Your power company cannot raise its rates without regulatory approval.
When economists try to measure legal rules and institutions their approach is often a “just do it” one, implicitly assuming that the complexity of the law does not prevent it from being turned into numbers. Many legal academics, by contrast, have the attitude of “just don’t do it,” for instance, bluntly saying that “law is about things that are not quantifiable.” The purpose of this paper is to explain and discuss the different ways how law can be measured. More briefly it will also be addressed how, in a second step, these numbers can be used to show causal relationships. This second step can be very contentious and complicated; yet, the core interest of this paper is on the preliminary question on how quantitative data on law can be found or constructed. This paper does not attempt a comprehensive review of the literature on quantitative research in law but it will provide representative examples, mainly focusing on comparative legal studies.
ResearchGate has not been able to resolve any references for this publication.