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Resolutions, Recoveries and Relationships: The Evolution of Payment Disputes in Central and Eastern Europe

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Author Info
William Pyle ()
Abstract

What determines the mechanism chosen to resolve a commercial dispute? To what degree does the aggrieved recover damages? And does the relationship survive in the aftermath? The answers to these questions affect expectations as to the costs of transacting and, thereby, the development of markets. But they have received almost no attention in the economic literature on the post-socialist transition. This article exploits a rich survey of small and medium-sized manufacturing enterprises in three Central and East European countries to explain responses to an inter-firm payment dispute. The evidence suggests that behavior at successive stages is strongly influenced by the transaction costs associated with greater geographic distance between the firms. The evidence also strongly suggests that the costs of a dispute can be mitigated by membership in a business association.

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File URL: http://www.middlebury.edu/services/econ/repec/mdl/ancoec/0523.pdf
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Publisher Info
Paper provided by Middlebury College, Department of Economics in its series Middlebury College Working Paper Series with number 0523.

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Length: 57 pages
Date of creation: 2005
Date of revision:
Handle: RePEc:mdl:mdlpap:0523

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Find related papers by JEL classification:
D23 - Microeconomics - - Production and Organizations - - - Organizational Behavior; Transaction Costs; Property Rights
D74 - Microeconomics - - Analysis of Collective Decision-Making - - - Conflict; Conflict Resolution; Alliances
K40 - Law and Economics - - Legal Procedure, the Legal System, and Illegal Behavior - - - General
K41 - Law and Economics - - Legal Procedure, the Legal System, and Illegal Behavior - - - Litigation Process
P37 - Economic Systems - - Socialist Institutions and Their Transitions - - - Legal

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