Legal origin, financial development, and innovation: evidence from large public and private firms in the U.S. and Europe

This paper investigates the interplay between legal origin, financial market development, and the growth and innovation patterns of the population of large firms in U.S. and Europe. We document that common law countries (namely U.S., U.K., and Ireland) are characterized by a higher degree of stock market development and an increased propensity of firms to be publicly traded relative to Continental Europe. We also find that firms based in common...