摘要：The "law and finance theory" predicts that the common law system provides the best basis for
financial development and economic growth, followed by Scandinavian and German origin
civil law and finally French origin civil law. Referring to a number of sceptical views, this
paper argues that the theory faces an identification problem, since the majority of common
law countries have a market-based financial system, whereas the majority of civil law coun-
tries have a bank-based financial system. Moreover, there are plausible alternative hypotheses
to explain the quality of the financial system; but that they cannot rule out that the theory re-
fers to a relevant link between the legal tradition and financial development. Finally it is ar-
gued that the corner stone of the law and finance theory is the proposition that different legal
traditions imply different degrees of investor protection. It is demonstrated that a few minor,
but sensible modifications in aggregating the original indicator set produce results that are dif-
ferent from those reported so far and contradictory to the theory's ranking of the four major
legal families in terms of investor protection. Accordingly, the validity of the theory's investor
protection measures for international comparisons, the supremacy of the common law legacy
in protecting investors and, consequently, the validity of legal origin variables to instrument
for financial development, have to be regarded as myths rather than truths.
