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

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.