CHAPTER 3

Formal External Institutions in the Italian Economy

Legal System and Regulatory Pressures

Legal systems tend to have an impact on corporate governance practices, at national as well as at firm-level. For this reason, an understanding of the main characteristics of different types of legal systems helps to understand differences in corporate governance regimes (La Porta, Lopez-de-Silanes, Shleifer, and Vishny 2000).

Legal systems in countries around the world generally fall into one of two main categories: common law systems and civil law systems. The main difference between the two legal systems is that in common law countries, case law—in the form of published judicial opinions—is of primary importance, whereas in civil law systems, ...

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