Best Paper - Volume 8

The JFI editors are pleased to announce that the JFI Best Paper Prize for the most significant paper published in the 1999 Journal of Financial Intermediation has gone to Ross Levine for the paper, "Law, Finance, and Economic Growth," published in Volume 8, Issue 1/2. The prize carries with it a $2,500 check for the winner.

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Law, Finance, and Economic Growth
Ross Levine
CSOM, University of Minnesota, Twin Cities, Minneapolis, MN 55455

Abstract

This paper examines the question of how the legal environment affects financial development, and then asks how this in turn is linked to long-run economic growth. Financial intermediaries are better developed in countries with legal and regulatory systems that (1) give a high priority to creditors receiving the full present value of their claims on corporations, (2) enforce contracts effectively, and (3) promote comprehensive and accurate financial reporting by corporations. The data also indicate that the exogenous component of financial intermediary development – the component defined by the legal and regulatory environment – is positively associated with economic growth. Journal of Economic Literature Classification Numbers: G21, K12, O16. ©1999 Academic Press, Inc.