Law, endowments, and finance [Dataset]

The law and finance theory holds that legal traditions, brought by colonizers, differ in terms of protecting the rights of private investors vis-à-vis the state, with important implications for financial development. The endowment theory argues that the disease environment encountered by colonizers influences the formation of long-lasting institutions.

The empirical results provide evidence for both theories. However, initial endowments are more robustly associated with financial intermediary development and explain more of the cross-country variation in financial intermediary and stock market development.