Campus Units

Finance

Document Type

Article

Publication Version

Accepted Manuscript

Publication Date

5-13-2016

Journal or Book Title

The Review of Financial Studies

Volume

30

Issue

3

First Page

1019

Last Page

1051

DOI

10.1093/rfs/hhw030

Abstract

This paper provides novel evidence on the real and financial market effects of legal institutions. Our analysis exploits persistent and externally imposed differences in court enforcement that arose when the U.S. Congress assigned state courts to adjudicate contracts on a subset of Native American reservations. Using area-specific data on small business lending, we find that reservations assigned to state courts, which enforce contracts more predictably than tribal courts, have stronger credit markets. Moreover, the law-driven component of credit market development is associated with significantly higher per capita income, with stronger effects in sectors that depend more on external financing.

Comments

This is a pre-copyedited, author-produced version of an article accepted for publication in The Review of Financial Studies, following peer review. The version of record Law and Finance Matter: Lessons from Externally Imposed Courts James R. Brown J. Anthony Cookson Rawley Z. Heimer; Volume 30, Issue 3, 1 March 2017, Pages 1019–1051. is available online at: DOI: 10.1093/rfs/hhw030. Posted with permission.

Copyright Owner

Oxford Academic

Language

en

File Format

application/pdf

Available for download on Monday, May 13, 2019

Published Version

Share

COinS