Limited enforcement and the organization of production

Erwan Quintin ()

Journal of Macroeconomics, 2008, vol. 30, issue 3, 1222-1245

Abstract: This paper describes a dynamic, general equilibrium model designed to gauge the importance of contractual imperfections in the form of limited enforcement for international differences in the organization of production. In the model, limited enforcement constrains agents to operate establishments below their optimal scale. As a result, economies where contracts are enforced more efficiently tend to be richer and emphasize large scale production. Calibrated simulations of the model reveal that these effects can be large and account for a sizeable part of the observed differences in the size distribution of manufacturing establishments between the United States, Mexico and Argentina.

Date: 2008
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Citations: View citations in EconPapers (27)

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Related works:
Working Paper: Limited enforcement and the organization of production (2003)
Working Paper: Limited enforcement and the organization of production (2001)
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Persistent link: https://EconPapers.repec.org/RePEc:eee:jmacro:v:30:y:2008:i:3:p:1222-1245

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