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Judicial quality and regional firm performance: The case of Indian states

Listed author(s):
  • Chakraborty, Pavel
Registered author(s):

    Higher quality institutions help a firm to invest in institutional-dependent inputs, which might affect a firm's performance. I use data for Indian manufacturing that matches state-by-state firm-level data with state-by-state data on particularly important institution – Judicial quality. Results show that judicial quality is a significant determinant of higher firm performance – both for exports and domestic sales. My most conservative estimate suggests that a 10% increase in judicial quality of a region helps to increase the sales of a firm by 1–2%. I explicitly control for the ‘selection’ effect by using a two-step Average Treatment Effect (ATE) procedure. The results also support my initial findings. My results are robust to a battery of robustness checks.

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    File URL: http://www.sciencedirect.com/science/article/pii/S0147596716300348
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    Article provided by Elsevier in its journal Journal of Comparative Economics.

    Volume (Year): 44 (2016)
    Issue (Month): 4 ()
    Pages: 902-918

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    Handle: RePEc:eee:jcecon:v:44:y:2016:i:4:p:902-918
    DOI: 10.1016/j.jce.2016.07.001
    Contact details of provider: Web page: http://www.elsevier.com/locate/inca/622864

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