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Access to Justice and Entrepreneurship: Evidence from Brazil's Special Civil Tribunals

Guilherme Lichand () and Rodrigo Soares
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Guilherme Lichand: University of Zurich

No 5917, IZA Discussion Papers from Institute of Labor Economics (IZA)

Abstract: Entrepreneurship is usually identified as an important determinant of aggregate productivity and long-term growth. The determinants of entrepreneurship, nevertheless, are not entirely understood. A recent literature has linked entrepreneurship to the development of the justice system. This paper contributes to this literature by evaluating the role of access to justice in determining the incidence of entrepreneurship. We explore the creation of Special Civil Tribunals in the Brazilian state of São Paulo during the 1990s. Special Civil Tribunals increased the geographic presence of the justice system, simplified judicial procedures, and increased the speed of adjudication of disputes. Using census data, and difference-in-differences and instrumental variable strategies, we find that implementation of Special Civil Tribunals led to increased entrepreneurship, defined as the probability that individuals are employers or self-employed. Results are particularly strong and robust for the case of self-employment, and do not seem to be related to other changes in infrastructure or public good provision at the local level, or to pre-existing trends in entrepreneurship.

Keywords: entrepreneurship; courts; access to justice; institutions; Brazil (search for similar items in EconPapers)
JEL-codes: H41 K1 K41 K42 O12 O17 O54 (search for similar items in EconPapers)
Pages: 39 pages
Date: 2011-08
New Economics Papers: this item is included in nep-ent, nep-iue and nep-law
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Citations: View citations in EconPapers (2) Track citations by RSS feed

Published - published in: Journal of Law and Economics, 2014, 57 (2), 459-499

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Related works:
Journal Article: Access to Justice and Entrepreneurship: Evidence from Brazil's Special Civil Tribunals (2014) Downloads
Working Paper: Access to justice and entrepreneurship: evidence from Brazil’s Special Civil Tribunals (2011) Downloads
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