This file is part of IDEAS, which uses RePEc data


[ Papers | Articles | Software | Books | Chapters | Authors | Institutions | JEL Classification | NEP reports | Search | New papers by email | Author registration | Rankings | Volunteers | FAQ | Blog | Help! ]

Should Courts Enforce Credit Contracts Strictly ?

Author info | Abstract | Publisher info | Download info | Related research | Statistics
Author Info
Alberto ZAZZARO () (Universita' Politecnica delle Marche, Dipartimento di Economia)

Additional information is available for the following registered author(s):

Abstract

The linkages between law and finance are currently the centre of wideranging empirical investigations. This article analyse the effects of legal system efficiency on the functioning of the credit market by using a simple banking model with information asymmetries about borrowers'entrepreneurial talent. It is shown that improvements in the enforcement of contracts by courts reduce agency problems, but can also reduce banks' incentive to adequately screen borrowers, thus worsening credit allocation and social welfare. Improvements in accounting standards, however, always make bank screening of borrowers less costly and improve credit allocation.

Download Info
To download:

If you experience problems downloading a file, check if you have the proper application to view it first. Information about this may be contained in the File-Format links below. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.

File URL: http://dea2.univpm.it/quaderni/pdf/181.pdf
File Format: application/pdf
File Function: First version, 2003
Download Restriction: no

Publisher Info
Paper provided by Universita' Politecnica delle Marche (I), Dipartimento di Economia in its series Working Papers with number 181.

Download reference. The following formats are available: HTML (with abstract), plain text (with abstract), BibTeX, RIS (EndNote, RefMan, ProCite), ReDIF
Length:
Date of creation: May 2003
Date of revision:
Handle: RePEc:anc:wpaper:181

Contact details of provider:
Web page: http://www.dea.univpm.it/

For technical questions regarding this item, or to correct its listing, contact: (Maurizio Mariotti).

Related research
Keywords: accounting standards; credit allocation; law enforcement; screening;

Other versions of this item:

Find related papers by JEL classification:
G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Mortgages
K41 - Law and Economics - - Legal Procedure, the Legal System, and Illegal Behavior - - - Litigation Process
K42 - Law and Economics - - Legal Procedure, the Legal System, and Illegal Behavior - - - Illegal Behavior and the Enforcement of Law

Cited by:
(explanations, Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.)

  1. Régis Blazy & Bertrand Chopard & Agnès Fimayer, 2006. "Bankruptcy Law: a Mechanism of Governance for Financially Distressed Firms," Working Papers of CREFI-LSF (Centre of Research in Finance - Luxembourg School of Finance) 06-05, CREFI-LSF, University of Luxembourg. [Downloadable!]
    Other versions:
  2. Strauss, Jason David, 2008. "Uberrimae Fidei and Adverse Selection: the equitable legal judgment of Insurance Contracts," MPRA Paper 10874, University Library of Munich, Germany. [Downloadable!]
  3. Charles Yuji Horioka & Shizuka Sekita, 2009. "Are Fast Court Proceedings Good or Bad ? : Evidence from Japanese Household Panel Data," Working Papers 0916, Groupe d'Analyse et de Théorie Economique (GATE), Centre national de la recherche scientifique (CNRS), Université Lyon 2, Ecole Normale Supérieure. [Downloadable!]
    Other versions:
  4. Hainz, Christa, 2007. "The Effect of Bank Competition on the Bank's Incentive to Collateralize," Discussion Papers in Economics 2007, University of Munich, Department of Economics. [Downloadable!]
    Other versions:
Statistics
Access and download statistics

Did you know? You can use convenient plug-ins to search directly IDEAS from your browser.

This page was last updated on 2009-11-26.

This information is provided to you by IDEAS at the Department of Economics, College of Liberal Arts and Sciences, University of Connecticut using RePEc data on a server sponsored by the Society for Economic Dynamics.