TY  - UNPD
A1  - Pezone, Vincenzo
T1  - The real effects of judicial enforcement: evidence from Italy
T2  - SAFE working paper series ; No. 192
N2  - I analyze the real effects of the quality of the judicial enforcement by showing that an increase in the average duration of civil proceedings reduces firms' employment. I exploit a reorganization of court districts in Italy as an exogenous shock to court productivity and, using an instrumental variable approach, estimate an elasticity of employment to average trial length between -0.24 and -0.29. These results are very different from OLS estimates which do not control for endogeneity, and suggest that stronger law enforcement eases financing constraints. The effects are more pronounced in highly levered and more financially dependent firms, and appear to affect mainly firms in less financially developed areas. Revenues respond more slowly than employment to the reform, and wages fall as the judiciary improves. There is no evidence of effects on capital structure and profitability. These results offer a more complete picture of the interplay between legal institutions and real economic outcomes.
T3  - SAFE working paper - 192 
KW  - law enforcement
KW  - duration of civil proceedings
KW  - financing constraint
KW  - finance and employment
Y1  - 2017
UR  - http://publikationen.ub.uni-frankfurt.de/frontdoor/index/index/docId/45377
UR  - https://nbn-resolving.org/urn:nbn:de:hebis:30:3-453772
UR  - https://ssrn.com/abstract=3090884
IS  - Friday 8th December, 2017, 13:33
PB  - SAFE
CY  - Frankfurt am Main
ER  -