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

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  • 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.

Suggested Citation

  • William Pyle, 2005. "Resolutions, Recoveries and Relationships: The Evolution of Payment Disputes in Central and Eastern Europe," Middlebury College Working Paper Series 0523, Middlebury College, Department of Economics.
  • Handle: RePEc:mdl:mdlpap:0523
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    Citations

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    Cited by:

    1. Jens Prüfer, 2016. "Business Associations and Private Ordering," The Journal of Law, Economics, and Organization, Oxford University Press, vol. 32(2), pages 306-358.
    2. Larrain Aylwin, M.J. & Prüfer, J.O., 2014. "Business Associations, Lobbying, and Endogenous Institutions," Other publications TiSEM 99d2d002-87d2-4d8e-b1d9-8, Tilburg University, School of Economics and Management.
    3. Dimitrova-Grajzl, Valentina & Grajzl, Peter & Slavov, Atanas & Zajc, Katarina, 2016. "Courts in a transition economy: Case disposition and the quantity–quality tradeoff in Bulgaria," Economic Systems, Elsevier, vol. 40(1), pages 18-38.
    4. Pyle, William, 2007. "Organized business, political regimes and property rights across the Russian Federation," BOFIT Discussion Papers 18/2007, Bank of Finland Institute for Emerging Economies (BOFIT).
    5. Larrain Aylwin, M.J. & Prüfer, J.O., 2014. "Business Associations, Lobbying, and Endogenous Institutions," Discussion Paper 2014-071, Tilburg University, Center for Economic Research.
    6. Peter Grajzl & Valentina Dimitrova-Grajzl & Katarina Zajc, 2016. "Inside post-socialist courts: the determinants of adjudicatory outcomes in Slovenian commercial disputes," European Journal of Law and Economics, Springer, vol. 41(1), pages 85-115, February.
    7. Dimitrova-Grajzl, Valentina & Grajzl, Peter & Zajc, Katarina, 2014. "Understanding modes of civil case disposition: Evidence from Slovenian courts," Journal of Comparative Economics, Elsevier, vol. 42(4), pages 924-939.
    8. repec:zbw:bofitp:2007_018 is not listed on IDEAS
    9. Peter Grajzl, 2014. "Behind the Courts’ Walls: Empirical Insights from Slovenia," ifo DICE Report, ifo Institute - Leibniz Institute for Economic Research at the University of Munich, vol. 12(03), pages 39-44, October.
    10. repec:ces:ifodic:v:12:y:2014:i:3:p:19131886 is not listed on IDEAS
    11. William Pyle, 2006. "Collective action and post-communist enterprise: The economic logic of Russia's business associations," Europe-Asia Studies, Taylor & Francis Journals, vol. 58(4), pages 491-521.
    12. Larrain Aylwin, M.J. & Prüfer, J.O., 2014. "Business Associations, Lobbying, and Endogenous Institutions," Other publications TiSEM bb36b0e2-f17f-4d76-8637-a, Tilburg University, School of Economics and Management.
    13. El-Haddad, Amirah, 2008. "Dispute resolution mechanisms in the Egyptian garment industry," Economics Letters, Elsevier, vol. 99(3), pages 425-430, June.
    14. Peter Grajzl, 2014. "Behind the Courts’ Walls: Empirical Insights from Slovenia," ifo DICE Report, ifo Institute - Leibniz Institute for Economic Research at the University of Munich, vol. 12(3), pages 39-44, October.
    15. William Pyle, 2007. "Organized Business, Political Regimes and Property Rights across the Russian Federation," Middlebury College Working Paper Series 0703, Middlebury College, Department of Economics.

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    More about this item

    JEL classification:

    • D23 - Microeconomics - - Production and Organizations - - - Organizational Behavior; Transaction Costs; Property Rights
    • D74 - Microeconomics - - Analysis of Collective Decision-Making - - - Conflict; Conflict Resolution; Alliances; Revolutions
    • 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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