Journal Article

Does Court Speed Shape Economic Activity? Evidence from a Court Reform in India

Matthieu Chemin

in The Journal of Law, Economics, and Organization

Volume 28, issue 3, pages 460-485
Published in print August 2012 | ISSN: 8756-6222
Published online November 2010 | e-ISSN: 1465-7341 | DOI: https://dx.doi.org/10.1093/jleo/ewq014
Does Court Speed Shape Economic Activity? Evidence from a Court Reform in India

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  • Market Structure, Firm Strategy, and Market Performance
  • Economic Development
  • Game Theory and Bargaining Theory
  • Production and Organizations
  • Law and Economics
  • Contract Law

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This article investigates the impact of quick courts on firms' contracting behavior 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 had 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 court speed on firms' behavior. Using data on small firms, I find that the reform led to fewer breaches of contract, encouraged investment, and facilitated access to finance.

Keywords: K0; K12; K40; K42; O12; O17; L14; D23; C72

Journal Article.  11445 words.  Illustrated.

Subjects: Market Structure, Firm Strategy, and Market Performance ; Economic Development ; Game Theory and Bargaining Theory ; Production and Organizations ; Law and Economics ; Contract Law

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