Does Arbitration Blossom when State Courts are Bad?
It is often conjectured that non-state dispute resolution blossoms when state courts are not independent or are perceived as low-quality courts. This conjecture implies a substitutive relationship between state and non-state dispute resolution. An alternative hypothesis argues that both the quality and the frequency of use of these two alternative mechanisms are complementary: societies with high-quality state courts would also be able to provide high-quality non-state dispute resolution. This is the first study that puts these hypotheses to an empirical test. It turns out that the lower the perceived quality of state courts, the less frequently conflicting firms resort to them. Second, firms in common-law countries turn away from state courts significantly more often than firms in civil-law countries. This result sheds doubt on the robustness of results generated within the legal traditions literature. Finally, in states that have created the preconditions for arbitration, businesspeople resort significantly more often to state courts. We interpret this as evidence in favor of the complementarity hypothesis.
|Date of creation:||2009|
|Date of revision:|
|Publication status:||Forthcoming in|
|Contact details of provider:|| Postal: Universitätsstraße 25, 35037 Marburg|
Web page: http://www.uni-marburg.de/fb02/
More information through EDIRC
References listed on IDEAS
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.:
- Frye, Timothy & Zhuravskaya, Ekaterina, 2001.
"Rackets, Regulation and the Rule of Law,"
CEPR Discussion Papers
2716, C.E.P.R. Discussion Papers.
- Lars P. Feld & Stefan Voigt, 2003.
"Economic Growth and Judicial Independence: Cross Country Evidence Using a New Set of Indicators,"
CESifo Working Paper Series
906, CESifo Group Munich.
- Feld, Lars P. & Voigt, Stefan, 2003. "Economic growth and judicial independence: cross-country evidence using a new set of indicators," European Journal of Political Economy, Elsevier, vol. 19(3), pages 497-527, September.
- Rafael La Porta & Florencio Lopez-de-Silanes & Andrei Shleifer, 2007.
"The Economic Consequences of Legal Origins,"
NBER Working Papers
13608, National Bureau of Economic Research, Inc.
- Bernd Hayo & Stefan Voigt, 2008.
"The Relevance of Judicial Procedure for Economic Growth,"
MAGKS Papers on Economics
200828, Philipps-Universität Marburg, Faculty of Business Administration and Economics, Department of Economics (Volkswirtschaftliche Abteilung).
- Bernd Hayo & Stefan Voigt, 2008. "The Relevance of Judicial Procedure for Economic Growth," CESifo Working Paper Series 2514, CESifo Group Munich.
- William M. Landes & Richard A. Posner, 1978. "Adjudication as a Private Good," NBER Working Papers 0263, National Bureau of Economic Research, Inc.
- Lars P. Feld & Stefan Voigt, 2004.
"Making Judges Independent – Some Proposals Regarding the Judiciary,"
CESifo Working Paper Series
1260, CESifo Group Munich.
- Lars P. Feld & Stefan Voigt, 2004. "Making Judges Independent – Some Proposals Regarding the Judiciary+," Marburg Working Papers on Economics 200429, Philipps-Universität Marburg, Faculty of Business Administration and Economics, Department of Economics (Volkswirtschaftliche Abteilung).
- Stefan Voigt, 2008. "The economic effects of judicial accountability: cross-country evidence," European Journal of Law and Economics, Springer, vol. 25(2), pages 95-123, April.
When requesting a correction, please mention this item's handle: RePEc:mar:magkse:200906. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Bernd Hayo)
If references are entirely missing, you can add them using this form.