Shareholder Protection in the USA and Germany - “Law and Finance” Revisited

Abstract

Though Company Laws of the United States and Germany have much in common, they are opposite in many important ways. While the Anglo-Saxon Law derives from Common Law, German Law has its origin in the Civil Law.La Porta et al. are not the only ones highlighting that the quality of shareholder protection varies across different jurisdictions depending on which legal system family the jurisdiction belongs. Pistor and Siems went a step further, highlighting that variations in market systems are explainable by more fundamental factors than law, like differences in the underlying ground rules.