Comparative legal scholars agree that, even though no two nations' laws are exactly alike, some national legal systems are sufficiently similar in certain critical respects to permit the classification of national legal systems into major families of law. Although there is no unanimity among legal scholars on how to define legal families, "among the criteria often used for this purpose are the following:
* historical background and development of the legal system,
* theories and hierarchies of sources of law,
* the working methodology of jurists within the legal systems,
* the characteristics of legal concepts employed by the system,
* the legal institutions of the system, and
* the divisions of law employed within a system"
Based on this approach, scholars identify two broad legal traditions: Civil law and Common law.
According to the law and finance literature, the English and French legal traditions spread throughout the world through conquest, colonization, and imitation. Apart from the French model, there are said to be two other civil law traditions: the German and the Scandinavian. The seminal moment for the German legal tradition is the adoption of the German Civil Code in 1900. Much like its French counterpart, the German legal tradition is based on Roman civil law and was subsequently exported to other countries. By contrast, the Scandinavian legal tradition, which developed relatively independently in the seventeenth and eighteenth centuries, is less closely linked with Roman civil law and has not spread throughout the world. Finally, some studies refer to a socialist-transition legal family, which is based on the legal tradition that emerged from the breakup of the Soviet Union.
The genesis of the classed two broad legal traditions: Civil law and Common law may be stated as:
Civil Law: The Civil, or Romano-Germanic legal tradition is the most influential, and the most widely distributed legal tradition around the world. It originates in Roman law, uses statutes and comprehensive codes as a primary means of ordering legal material, and relies heavily on legal scholars to ascertain and formulate its rules. Legal scholars typically identify three currently common families of laws within the civil law tradition: French, German, and Scandinavian. The French Commercial Code was written under Napoleon in 1807, and brought by his armies to Belgium, the Netherlands, part of Poland, Italy, and the Western regions of Germany. In the colonial era, France extended her legal influence to the Near East and Northern and Sub-Saharan Africa, Indochina, Oceania, and the French Caribbean islands. French legal influence has been significant as well in Luxembourg, Portugal, Spain, some of the Swiss cantons, and Italy. When the Spanish and Portuguese empires in Latin America dissolved in the 19th century, it was mainly the French civil law that the lawmakers of the new nations looked to for inspiration.
The German Commercial Code was written in 1897 after Bismarck’s unified Germany, and perhaps because it was produced several decades later, was not as widely adopted as the French Code. It had an important influence on the legal theory and doctrine in Austria, Czechoslovakia, Greece, Hungary, Italy, Switzerland, Yugoslavia, Japan, and Korea. Taiwan's laws came from China, which borrowed heavily from the German Code during its modernization.
The Scandinavian family is usually viewed as part of the civil law tradition, although its law is less derivative of Roman law than the French and German families. Although Nordic countries had civil codes as far back as the 18th century, these codes are not used anymore. Most writers describe the Scandinavian laws as similar to each other but "distinct" from others, so the 4 Nordic countries are treated generally as a separate family.
Common Law: The family referred to as the common law tradition includes the law of England and those laws modeled on English law. The common law historically is formed by judges who have to resolve specific disputes. Largely precedents from judicial decisions, as opposed to contributions by scholars, shape common law. The roots of English law presently are from enactments by the legislature, wherein the incremental changes are from judicial decisions. Common law has spread to British colonies, including the United States, Canada, Australia, India, Singapore, and many other countries.
The tradition of the English Common Law has been one of gradual development from decision to decision: historically speaking, it has been case law derived, not enacted law. On the Continent, the development since the reception of Roman law has been quite different, from the interpretation of the Justinian's Corpus Juris to the codification, nation by nation, of abstract rules. So common law comes from the court, Continental Law from the study, the great jurists of England was judges, in the Continent professors. The base premise being, in the Continent, lawyers faced with a problem, even a new and unforeseen one, ask what solution the rule provides, in England and the United States they predict how the judge would deal with the problem, given existing decisions.
In most cases, such classification is uncontroversial. In some cases, however, while the basic origin of laws is clear, laws over time have been amended to incorporate the needs of the adopting country as well as influences from other families. For example, although Ecuador is a French civil law country, its company law was revised in 1977 in part to incorporate some common law rules. After World War II, the American occupying army changed some Japanese laws, although their basic German civil law structure remained. While Italian laws originate in the French tradition, over years they had some German influence. In all these and several other cases, they have classified a country based on the original structure of the laws it adopted, rather than on the revisions.
Yet these and similar classifications are not at all self-evident. Rather, for about eighty percent of the 129 countries that Djankov, McLiesh & Shleifer examined, the categorization according to legal origin is far from clear. The difficulty arises mainly with respect to legal systems in Eastern Europe, Asia, Africa, and Latin America. Further, these can be amplified as if the Company Law of the People?s Republic of China of 1993 was primarily based upon the company laws of Taiwan, France, Germany, and Japan. For language reasons, legislators paid particularly close attention to the Taiwanese law. Yet, Taiwan's company law is itself a hybrid, since it was originally based on both German and Japanese law and, Japan after World War II, came under U.S. influence. As a result, codified Chinese company law is to a large extent a mixture of various legal influences and not simply of German legal origin. This can also be seen in other areas of Chinese law because, in contrast to Germany (or France), there is no comprehensive civil code, and Chinese securities law as the securities law panning the world is in principle based on the U.S. model. It is more difficult to criticize the classification of Japan as being of German legal origin. Between 1890 and 1900 Japan did indeed copy large parts of the five major German codes.
In Japan, however, these legal transplants have not necessarily retained their importance to Japanese law. For example, the Commercial Code of Japan has been substantially changed since World War II, in particular, because of American influence. The same is true for other areas of trade and business law. Indian law other than family law has followed the path of common law due to colonization as in many parts of the world, though many laws are written codes as opposed to principles evolved from judicial pronouncements; primordial being the law for contracts which as then was the principles of contract law as laid down by pronouncements in England.
The religious traditions, such as Jewish law, Canon Law, Hindu law, and Muslim law, appear to be less relevant in matters of investor protections. Thus the Arabian countries unquestionably belong to Islamic law as far as family and inheritance law is concerned, just as in India personal law belongs to the religion professed by its citizen. In India family and inheritance law derives its origin from 'religious precepts' of its citizen, as for Hindus the applicable family and inheritance law has its genesis in ancient Hindu law, for Muslims Islamic laws, albeit largely codified accepting customs and traditions were uncodified. The economic law of these countries (including commercial law and the law of contract and tort) is heavily impressed by the legal thinking of the colonial and mandatory powers - the Common Law in the case of India, French law in the case of most of the Arab States.
France adopted a civil law system characterized by fact-finding by state-employed judges, automatic review of decisions, and, later, a reliance on codes rather than judicial discretion. In contrast, England developed a common law system that relied on fact-finding by juries, independent judges, infrequent appeals, and judge-made law rather than strict codes. It may be probably said that pure legal systems no longer exists, In India with the large number of tribunals being formed under countries classed as common law system as in India, to address the need for specialized domain knowledge, address the delays in the judicial system, but with a conflicting mandate without its attendant jurisprudence, subject to appeals thereto to the judicial system, tribunals largely mandated to be a bench of ex-judges man along with technical members, thus reflecting a distinct partial move towards the civil law system. Similarly, civil law systems have adopted nuanced approaches to the common law system.
Analysis of legal families has become relevant in finance where the legal system plays a crucial back of the mind role in capital investments and capital flows, notwithstanding those securities laws are harmonized to US securities laws, primordial research being 'The Economic Consequences of Legal Origins' for the last dozen years, Raphael La Porta, Florencio Lopez-de-Silanes, Andrei Shleifer, Robert Vishny (LLSV), and an array of co-authors and independent scholars have put together an impressive collection of papers which argue that legal origin helps explain investor protection, labor regulation, government ownership of banks, unemployment, the size of capital markets, and numerous other aspects of modern economies. To classify countries into legal families, LLSV relied principally on a publication of the American Association of Law Libraries called "Foreign Law: Current Sources of Codes and Basic Legislation in Jurisdictions around the World" by Reynolds and Flores.
 Glendon, M., Gordon M., Osakwe C., Comparative Legal Cambridge. Cambridge University Press. 1992 Ed., UK; Since 1970
 See Beck & Levine, ibid. at 258-60
 See ibid. at 256, 258-59.
 Some studies regard the Scandinavian countries as part of the civil law tradition. See e.g. Rafael La Porta et al., “Law and Finance” (1998) 106 Journal of Political Economy 1113 at 1115 [La Porta et al., “Law and Finance”]. Others treat it as a separate legal family. See e.g. La Porta, Lopez-de-Silanes & Shleifer, “Securities Law”, supra note 9 at 14.
 See Beck & Levine, supra note 10 at 257.
 See Simeon Djankov, Caralee McLiesh & Andrei Shleifer, “Private Credit in 129 Countries” Journal of Financial Economics 84 (2007) 299–329.
 Zweigert, Konrad, Kotz H., Introduction to Comparative Law, Oxford: Clarendon Press.
 ibid @38
 Adopted at the 5th Sess. of the Standing Comm. 8th Nat’l People’s Cong., 29 December 1993, promulgated as Order No. 16 of the President of the P.R.C., 29 December 1993, effective 1 July 1994, trans. in The Company Law of the People’s Republic of China (Beijing: Foreign Language Press, 2001) (P.R.C.).
 See Mathias M. Siems, Convergence in Shareholder Law(Cambridge: Cambridge University Press)
 There are “only” two legislative sources. See General Principles of the Civil Law of the People’s Republic of China (adopted at the 4th Sess. of the 6th Nat’l People’s Cong., 12 April 1986, promulgated as Order No. 37 of the President of the P.R.C., 12 April 1986, effective 1 January 1987) (P.R.C.), trans. by Chinacourt, online: Chinacourt <http://en.chinacourt.org/public/detail.php?id=2696>; The Contract Law of the People’s Republic of China (adopted at the 2d Sess. of the 9th Nat’l People’s Cong., 15 March 1999, effective 1 October 1999)(P.R.C.), trans. online: Judicial Protection of IPR in China <http://www.chinaiprlaw.com/english/laws/laws2.htm>.
 See Lawrence S. Liu, “Chinese Characteristics Compared: A Legal and Policy Perspective of Corporate Finance and Governance in Taiwan and China” (2001) at 2, online: Social Sciences Research Network <http://ssrn.com/abstract=273174>.
 See e.g. Zweigert & Kötz; supra note 16 at 298-301. But see Masao Ishimoto, “L’influence du Code civil français sur le droit civil japonais”  R.I.D.C. 744.
 See generally Curtis Milhaupt, “Creative Norm Destruction: The Evolution of Nonlegal Rules in Japanese Corporate Governance” (2001) 149 U.Pa. L. Rev. 2083. Milhaupt writes: [T]he validity of the classification scheme used [by certain authors] to create the legal origin variable is highly suspect. For example, these studies list Japan as belonging to the German civil law family. This is partially, but only partially, true of Japan’s five major codes ... But many subsequent Commercial Code revisions and [a number of] important economic regulatory statutes [bearing on investor protections] are of U.S. origin. German law has had only a minor influence on postwar Japanese legal developments. Thus, the classification for Japan is only about partially accurate and no theory is offered to explain why legal origin, as opposed to subsequent legal developments, would be determinative of corporate governance patterns. It would not be surprising if the classifications of legal origin for other countries in the study were subject to similar defects (ibid. at 2123, n. 131).
 See R. Daniel Kelemen & Eric C. Sibbitt, “The Americanization of Japanese Law” (2002) 23 U. Pa. J. Int’l Econ. L. 269.
 Raphael La Porta, Florencio Lopez-de-Silanes, Andrei Shleifer, Robert Vishny (LLSV): Journal of Economic Literature 2008, 46:2, 285–332: http:www.aeaweb.org/articles.php?doi 10.1257/jel.46.2.285
 Reynolds, Flores., Foreign Law: Current Sources of Codes and Basic Legislation in Jurisdictions Around the World; 1989 Compare Thorsten Beck & Ross Levine, “Legal Institutions and Financial Development” in Claude Ménard & Mary M. Shirley, eds., Handbook of New Institutional Economics (Dordrecht, Neth.: Springer, 2005) 251 at 254-58 (tracing origins to the fifteenth century for France and to the sixteenth and seventeenth centuries for England).