Corporate governance, legal system, and stock market liquidity: Evidence around the world

Kee H. Chung, Joon Seok Kim, Kwangwoo Park, Taeyoon Sung

Research output: Contribution to journalArticle

9 Citations (Scopus)


This study shows that firms in the common law countries tend to have better corporate governance structures and greater stock market liquidity than firms in civil law countries. Stock market liquidity is greater for firms with a superior governance structure regardless of the legal origins of the relevant country (i.e., in both common and civil law countries), than for firms with an inferior governance structure. Our findings suggest that legal and regulatory environments for protecting shareholders at the country level and good corporate governance at the firm level are complementary because strong shareholder protection rights reinforce the effectiveness of corporate governance in improving stock market liquidity.

Original languageEnglish
Pages (from-to)686-703
Number of pages18
JournalAsia-Pacific Journal of Financial Studies
Issue number6
Publication statusPublished - 2012 Dec


All Science Journal Classification (ASJC) codes

  • Finance

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