Do property rights matter? Evidence from a property law enactment

Research output: Journal Publications and Reviews (RGC: 21, 22, 62)21_Publication in refereed journal

31 Scopus Citations
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  • Daniel Berkowitz
  • Chen Lin
  • Yue Ma

Related Research Unit(s)


Original languageEnglish
Pages (from-to)583-593
Journal / PublicationJournal of Financial Economics
Issue number3
Online published9 Apr 2015
Publication statusPublished - Jun 2015


This paper considers a property law enactment that gave creditors more rights over the assets underlying their secured loans to private firms and gave private firms more protections against the potential expropriation of their assets. We find that this property law enactment led to a significant increase in firm value. We also find that the law's impact on value was more profound for firms with more tangible assets, lower internal cash flows, and stronger growth opportunities, and less profound for politically connected firms. Taken together, our findings confirm the importance of property rights protection in enhancing firm value.

Research Area(s)

  • Asset tangibility, Creditor rights, Expropriation risk, Political connections, Property rights