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Contract Law, Social Norms and Inter-firm Cooperation

Alessandro Arrighetti, Reinhard Bachmann and Simon Deakin

Cambridge Journal of Economics, 1997, vol. 21, issue 2, 171-95

Abstract: This paper analyzes the regulation of interfirm contracting in Germany, Britian, and Italy. Contrary to earlier empirical studies and to models drawn from transaction-cost theory, the authors find that contract law may play an important role in underpinning long-term, cooperative relationships and in fostering trust. The impact of contract law depends on the relationship between the legal system and other forms of institutional regulation, including trade associations and standard-setting bodies. Copyright 1997 by Oxford University Press.

Date: 1997
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