Legal Origins and the Financial Conservatism of Private Firms
Bibliographic record
Abstract
Following the literature of corporate law and finance, our study emphasizes on differences of legal origins and their laws influencing the capital structures of the private firms following suboptimal conservative policies. The countries considered in each legal origin represents common law countries (UK, Australia, India, Pakistan and Thailand) and Roman backed civil law countries (Japan, South Korea, Germany) respectively. The time series considered for the study is 2000-2017. The findings provide that the conservative private firms are smaller in size with less investments but are positively related with profitability in both legal origins. However, the dividend payouts and non-debt tax shields have significant positive relation with conservative policies in civil law countries. It shows that the presence of minority shareholders’ protection law in civil law countries directs the firms to pay more dividends which may also help them in reducing agency costs. We further exhibit that, before financial crises of 2008, the conservative firms in both legal origins are less directed towards dividends, especially in common law countries. Nevertheless, private conservative firms of civil law countries are more inclined towards dividend payouts after financial crises. The study implicates that the difference of laws in legal origins affect the capital structures of the conservative private firms. It further provides that because of the less effective credit markets, private firms may also be forced to adopt conservative policies in civil law countries but may also have less agency problems due to high probability of having dividend payouts.
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How this classification was reachedexpand
Full frame machine prediction
Teacher imitationNot calibrated prevalence, not ground truth. Human validation pending. The Gemma side is a direct model label for every work in the frame, read from the title-only record. The Codex side is a classifier learned from the 10,348 direct Codex labels and calibrated to design-weighted sample rates; fields without enough sample support carry no Codex call. Candidate is the union of the two sides; consensus is their intersection. These outputs are machine_predicted_unvalidated and are not human labels.
Distilled classifier scores by category (both heads)
| Category | Codex | Gemma |
|---|---|---|
| Metaresearch | 0.001 | 0.008 |
| Meta-epidemiology (narrow) | 0.000 | 0.000 |
| Meta-epidemiology (broad) | 0.000 | 0.000 |
| Bibliometrics | 0.001 | 0.001 |
| Science and technology studies | 0.001 | 0.002 |
| Scholarly communication | 0.002 | 0.001 |
| Open science | 0.000 | 0.001 |
| Research integrity | 0.000 | 0.000 |
| Insufficient payload (model declined to judge) | 0.003 | 0.000 |
Machine scores (provisional)
The two teacher heads of the student model, read on this work. A score orders the frame for review; it never asserts a category, and the validation status ships verbatim with every row.
Baseline scores from an immature model (maturity gate not passed, 7 training rounds). Scores rank; they never assert a category.
score_only:v0-immature-baseline · verbatim from the scoring run: score_only means the number may rank works, and no category label ships from itClassification
machine, unvalidatedMachine predicted; a candidate call from one source (direct Gemma or distilled Codex), not a consensus.
How this classification was reached, model by model and score by score, is at the end of the page under "How this classification was reached".