IDEAS home Printed from https://ideas.repec.org/a/tpr/restat/v102y2020i1p49-64.html
   My bibliography  Save this article

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

Author

Listed:
  • 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
    as

    Download full text from publisher

    File URL: http://www.mitpressjournals.org/doi/pdf/10.1162/rest_a_00799
    Download Restriction: Access to PDF is restricted to subscribers.
    ---><---

    As the access to this document is restricted, you may want to

    for a different version of it.

    References listed on IDEAS

    as
    1. Timothy Besley & Torsten Persson, 2011. "Pillars of Prosperity: The Political Economics of Development Clusters," Economics Books, Princeton University Press, edition 1, number 9624.
    2. Rafael La Porta & Florencio Lopez-de-Silanes & Cristian Pop-Eleches & Andrei Shleifer, 2004. "Judicial Checks and Balances," Journal of Political Economy, University of Chicago Press, vol. 112(2), pages 445-470, April.
    3. Nathan Nunn, 2007. "Relationship-Specificity, Incomplete Contracts, and the Pattern of Trade," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 122(2), pages 569-600.
    4. Florence Kondylis & Mattea Stein, 2023. "The Speed of Justice," The Review of Economics and Statistics, MIT Press, vol. 105(3), pages 596-613, May.
    5. Ulf von Lilienfeld‐Toal & Dilip Mookherjee & Sujata Visaria, 2012. "The Distributive Impact of Reforms in Credit Enforcement: Evidence From Indian Debt Recovery Tribunals," Econometrica, Econometric Society, vol. 80(2), pages 497-558, March.
    6. Aboal, Diego & Noya, Nelson & Rius, Andrés, 2014. "Contract Enforcement and Investment: A Systematic Review of the Evidence," World Development, Elsevier, vol. 64(C), pages 322-338.
    7. A. Patrick Behrer & Edward L. Glaeser & Giacomo A. M. Ponzetto & Andrei Shleifer, 2021. "Securing Property Rights," Journal of Political Economy, University of Chicago Press, vol. 129(4), pages 1157-1192.
    8. Andrei A. Levchenko, 2007. "Institutional Quality and International Trade," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 74(3), pages 791-819.
    9. Robert E. Hall & Charles I. Jones, 1999. "Why do Some Countries Produce So Much More Output Per Worker than Others?," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 114(1), pages 83-116.
    10. Greif, Avner, 1993. "Contract Enforceability and Economic Institutions in Early Trade: the Maghribi Traders' Coalition," American Economic Review, American Economic Association, vol. 83(3), pages 525-548, June.
    11. Guilherme Lichand & Rodrigo R. Soares, 2014. "Access to Justice and Entrepreneurship: Evidence from Brazil's Special Civil Tribunals," Journal of Law and Economics, University of Chicago Press, vol. 57(2), pages 459-499.
    12. Klein, Benjamin & Crawford, Robert G & Alchian, Armen A, 1978. "Vertical Integration, Appropriable Rents, and the Competitive Contracting Process," Journal of Law and Economics, University of Chicago Press, vol. 21(2), pages 297-326, October.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Bosio,Erica, 2023. "A Survey of Judicial Effectiveness : The Last Quarter Century of Empirical Evidence," Policy Research Working Paper Series 10501, The World Bank.
    2. 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).
    3. Beck, T.H.L., 2010. "Legal Institutions and Economic Development," Other publications TiSEM 8aa07b48-ce55-4cf6-8754-7, Tilburg University, School of Economics and Management.
    4. Andrei A. Levchenko, 2013. "International Trade and Institutional Change," The Journal of Law, Economics, and Organization, Oxford University Press, vol. 29(5), pages 1145-1181, October.
    5. Buchen, Clemens, 2010. "Emerging economic systems in Central and Eastern Europe – a qualitative and quantitative assessment," EconStor Theses, ZBW - Leibniz Information Centre for Economics, number 37141, October.
    6. Araujo, Luis & Mion, Giordano & Ornelas, Emanuel, 2016. "Institutions and export dynamics," Journal of International Economics, Elsevier, vol. 98(C), pages 2-20.
    7. Martin Strieborny & Madina Kukenova, 2016. "Investment in Relationship-Specific Assets: Does Finance Matter?," Review of Finance, European Finance Association, vol. 20(4), pages 1487-1515.
    8. Bas, Maria & Carluccio, Juan, 2009. "Wage bargaining and the boundaries of the multinational firm," LSE Research Online Documents on Economics 28700, London School of Economics and Political Science, LSE Library.
    9. Ramos Maqueda,Manuel & Chen,Daniel Li, 2021. "The Role of Justice in Development : The Data Revolution," Policy Research Working Paper Series 9720, The World Bank.
    10. Shu Yu & Jakob de Haan & Sjoerd Beugelsdijk & Jakob de Haan, 2011. "Trade, Trust and Institutions," CESifo Working Paper Series 3571, CESifo.
    11. Chemin, Matthieu & Kimalu, Paul & Newman-Bachand, Simon, 2024. "Courts, Crime and Economic Performance: Evidence from a Judicial Reform in Kenya," Journal of Public Economics, Elsevier, vol. 231(C).
    12. Daron Acemoglu & Pol Antras & Elhanan Helpman, 2005. "Contracts and the Division of Labor," Harvard Institute of Economic Research Working Papers 2074, Harvard - Institute of Economic Research.
    13. Se Mi Park, 2021. "The interrelation between formal and informal institutions through international trade," Review of International Economics, Wiley Blackwell, vol. 29(5), pages 1358-1381, November.
    14. Daron Acemoglu & Pol Antràs & Elhanan Helpman, 2007. "Contracts and Technology Adoption," American Economic Review, American Economic Association, vol. 97(3), pages 916-943, June.
    15. Yu, Shu & Beugelsdijk, Sjoerd & de Haan, Jakob, 2015. "Trade, trust and the rule of law," European Journal of Political Economy, Elsevier, vol. 37(C), pages 102-115.
    16. Essaji, Azim & Fujiwara, Kinya, 2012. "Contracting institutions and product quality," Journal of Comparative Economics, Elsevier, vol. 40(2), pages 269-278.
    17. Se Mi Park, 2023. "Domestic formal and informal institutions: their substitutability and comparative advantage," Review of World Economics (Weltwirtschaftliches Archiv), Springer;Institut für Weltwirtschaft (Kiel Institute for the World Economy), vol. 159(4), pages 853-886, November.
    18. Dejuan-Bitria, Daniel & Mora-Sanguinetti, Juan S., 2021. "Which legal procedure affects business investment most, and which companies are most sensitive? Evidence from microdata," Economic Modelling, Elsevier, vol. 94(C), pages 201-220.
    19. Abeliansky, Ana & Krenz, Astrid, 2015. "Democracy and international trade: Differential effects from a panel quantile regression framework," University of Göttingen Working Papers in Economics 243, University of Goettingen, Department of Economics.
    20. Florent Silve & Alexander Plekhanov, 2018. "Institutions, innovation and growth : Evidence from industry data," The Economics of Transition, The European Bank for Reconstruction and Development, vol. 26(3), pages 335-362, July.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:tpr:restat:v:102:y:2020:i:1:p:49-64. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: The MIT Press (email available below). General contact details of provider: https://direct.mit.edu/journals .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.