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Judicial Efficiency and Firm Productivity: Evidence from a World Database of Judicial Reforms

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  • Matthieu Chemin

    (McGill University, CIREQ, and CIRANO)

Abstract

I assemble and classify a database of judicial reforms funded by foreign aid agencies as either comprehensive (targeting all characteristics of quality, speed, access) or limited reform. A triple difference is used to compare firms in countries with or without judicial reforms, before and after reforms, and in sectors more or less reliant on contract enforcement mechanisms, due to their need for relationship-specific investments. I find that externally financed comprehensive judicial reforms improve perceptions of judiciary efficiency (for all firms) and firm productivity (for sectors relying on relationship-specific investments) by 0.15 and 0.09 (22%) standard deviation, respectively.

Suggested Citation

  • Matthieu Chemin, 2020. "Judicial Efficiency and Firm Productivity: Evidence from a World Database of Judicial Reforms," The Review of Economics and Statistics, MIT Press, vol. 102(1), pages 49-64, March.
    • Handle: RePEc:tpr:restat:v:102:y:2020:i:1:p:49-64
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    Cited by:

    1. Chemin, Matthieu, 2021. "Can judiciaries constrain executive power? Evidence from judicial reforms," Journal of Public Economics, Elsevier, vol. 199(C).
    2. Adamu Jibir & Musa Abdu & Farida Bello & Iliya Garba, 2019. "Do Institutions Promote Firm Performance? Evidence from Sub-Saharan Africa," Review of Market Integration, India Development Foundation, vol. 11(3), pages 111-137, December.
    3. Krahé, Max, 2023. "Italiens Stagnation verstehen," Papers 277907, Dezernat Zukunft - Institute for Macrofinance, Berlin.
    4. Sultan Mehmood, 2020. "Judicial Independence and Development: Evidence from Pakistan," Working Papers halshs-03054106, HAL.
    5. Giulia Canzian & Antonella Rita Ferrara, 2021. "Judicial Efficiency and Banks Credit Risk Exposure," CESifo Working Paper Series 8930, CESifo.
    6. Sultan Mehmood, 2021. "The impact of Presidential appointment of judges: Montesquieu or the Federalists?," AMSE Working Papers 2118, Aix-Marseille School of Economics, France.
    7. Pablo Brassiolo & Ricardo Estrada Martinez & Gustavo Fajardo & Julian Martinez-Correa, 2021. "Family Rules: Nepotism in the Mexican Judiciary," Asociación Argentina de Economía Política: Working Papers 4443, Asociación Argentina de Economía Política.
    8. Decarolis, Francesco & Mattera, Gianpiero & Menon, Carlo, 2020. "Delays at the Border: Court Efficiency and Delays in Public Contracts," CEPR Discussion Papers 14856, C.E.P.R. Discussion Papers.
    9. Joël Cariolle & Maëlan le Goff, 2023. "Spatial Internet Spillovers in Manufacturing," Journal of Development Studies, Taylor & Francis Journals, vol. 59(8), pages 1163-1186, August.
    10. Chemin, Matthieu & Chen, Daniel L. & Di Maro, Vincenzo & Kimalu, Paul & Mokaya, Momanyi & Ramos-Maqueda, Manuel, 2022. "Data Science for Justice: The Short-Term Effects of a Randomized Judicial Reform in Kenya," TSE Working Papers 22-1391, Toulouse School of Economics (TSE).
    11. Raffaela Giordano & Sergi Lanau & Pietro Tommasino & Petia Topalova, 2020. "Does public sector inefficiency constrain firm productivity? Evidence from Italian provinces," International Tax and Public Finance, Springer;International Institute of Public Finance, vol. 27(4), pages 1019-1049, August.
    12. Sultan Mehmood, 2021. "The impact of Presidential appointment of judges: Montesquieu or the Federalists?," Working Papers halshs-03161933, HAL.
    13. Sultan Mehmood, 2020. "Judicial Independence and Development: Evidence from Pakistan," AMSE Working Papers 2041, Aix-Marseille School of Economics, France.
    14. Santosh Adhikari & Michael Alexeev, 2022. "Judicial efficiency and the comparative disadvantage of Indian manufacturing," Review of Development Economics, Wiley Blackwell, vol. 26(1), pages 375-404, February.
    15. Shah, Muhammad Hashim & Xiao, Zuoping & Abdullah,, 2023. "Internal pyramid structure, judicial efficiency, firm-level governance and dividend policy," International Review of Economics & Finance, Elsevier, vol. 83(C), pages 764-785.
    16. Bhupatiraju,Sandeep & Chen,Daniel Li & Joshi,Shareen & Neis,Peter Konstantin, 2021. "Who Is in Justice? Caste, Religion and Gender in the Courts of Bihar over a Decade," Policy Research Working Paper Series 9555, The World Bank.
    17. Li, Wen & Peng, Qing, 2023. "Digital courts and corporate investment in sustainability: Evidence from China," International Review of Financial Analysis, Elsevier, vol. 88(C).
    18. Krahé, Max, 2023. "Understanding Italy's stagnation," Papers 277913, Dezernat Zukunft - Institute for Macrofinance, Berlin.
    19. Aberra, Adam & Chemin, Matthieu, 2021. "Does legal representation increase investment? Evidence from a field experiment in Kenya," Journal of Development Economics, Elsevier, vol. 150(C).
    20. Jean Baptiste Habyarimana & Vikas Kakkar, 2023. "Externally funded trade policy reforms and firm productivity: Evidence from a world database of reforms funded by foreign aid agencies," Kyklos, Wiley Blackwell, vol. 76(2), pages 196-222, May.

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