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Law Enforcement Proxies Matter for the Law and Finance Nexus

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  • Valentin Toci
  • Iraj Hashi

Abstract

The paper employs various measures of law enforcement to provide new evidence on the importance of legal institutions for different dimensions of financial development in transition economies. It offers a critical assessment of law enforcement measures employed in recent studies by showing that some proxies for law enforcement in the credit market may not be appropriate. Hence, care should be taken in how the quality of institutions is measured and the context which it represents. An original approach to measuring law enforcement in the credit market is developed by embodying the legal theory of dispute resolution and assessing this approach by collecting primary data for Kosovo. The findings suggest that Kosovo compares well with countries in the region andother transition economies in terms of the enforcement of creditor rights.

Suggested Citation

  • Valentin Toci & Iraj Hashi, 2013. "Law Enforcement Proxies Matter for the Law and Finance Nexus," International Journal of Finance & Banking Studies, Center for the Strategic Studies in Business and Finance, vol. 2(3), pages 57-75, July.
    • Handle: RePEc:rbs:ijfbss:v:2:y:2013:i:3:id:419
    DOI: 10.20525/ijfbs.v2i3.154
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    References listed on IDEAS

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