Judicial performance, bank lending and firms' investments: evidence from court leadership turnover

Franco Fiordelisi (), Davide Moretti (), Nazzareno Ruggiero () and Konstantinos Baltas ()
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Franco Fiordelisi: Essex Business School
Davide Moretti: Bank of Italy
Nazzareno Ruggiero: University of Salerno
Konstantinos Baltas: Essex Business School

No 1073, Questioni di Economia e Finanza (Occasional Papers) from Bank of Italy, Economic Research and International Relations Area

Abstract: We exploit plausibly exogenous variation in court-president appointments in Italy and show that leadership turnover slows the growth in the duration of bankruptcy proceedings. These effects are larger when incoming presidents are younger, have prior managerial experience, or are locally rooted in the court's jurisdiction, suggesting that career concerns and organizational learning play an important part. Improved judicial efficiency strengthens creditor rights through the credit channel: bank lending expands, late payments decline, and larger firms reallocate investment towards intangible assets.

Keywords: judicial efficiency; credit markets; firms' investments (search for similar items in EconPapers)
JEL-codes: E22 G21 G28 G33 L51 L53 O43 (search for similar items in EconPapers)
Date: 2026-10
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Persistent link: https://EconPapers.repec.org/RePEc:bdi:opques:qef_1073_26

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