Judicial quality, contract intensity and trade: Firm-level evidence from developing and transition countries

Ma, Yue, Qu, Baozhi, and Zhang, Yifan-Judicial quality, contract intensity and trade: Firm-level evidence from developing and transition countries Using firm-level data from 28 developing and transition countries, we investigate how judicial quality affects firm exports through relationship-specific investment. We find that a good legal system significantly increases exports among firms that use more customized goods as intermediate inputs. We control for potential reverse causality using propensity score matching. Our main results are robust to the use of different econometric methods. Journal of Comparative Economics 38 (2) (2010) 146-159. Department of Economics, Lingnan University, Hong Kong: Department of Economics and Finance, City University of Hong Kong, Hong Kong. (C) 2009 Association for Comparative Economic Studies Published by Elsevier Inc. All rights reserved.