Does Judicial Quality Shape Economic Activity? Evidence from a Judicial Reform in India

Matthieu Chemin ()

Cahiers de recherche from CIRPEE

Abstract: This paper investigates the impact of judiciaries on firms' contracting behaviour and economic performance. In 2002, the Code of Civil Procedure Amendment Act was enacted in India to facilitate speedy disposal of civil suits. Some State High Courts hal already enacted some of the amendments contained in this reform a long time ago. This spatial variation in the reform's implementation is used to identify the effect of judicial quality on firm's behavior. Using small informal firm data, I find that the reform led to fewer breaches of contract, encouraged investment, facilitated access to finance, and expanded rental markets.

Keywords: Law and economics; Institutions; Courts; Contracts; Industrial Organisation; Economic Growth; Industrial Performance (search for similar items in EconPapers)
JEL-codes: C72 D23 K10 K12 K40 K42 L14 O12 O17 (search for similar items in EconPapers)
Date: 2007
New Economics Papers: this item is included in nep-cwa, nep-dev and nep-law
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

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Persistent link: https://EconPapers.repec.org/RePEc:lvl:lacicr:0725

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