New Economics Papers
on Law and Economics
Issue of 2013‒02‒08
two papers chosen by
Jeong-Joon Lee, Towson University

  1. Firm size and judicial efficiency: evidence from the neighbour's court By Silvia Giacomelli; Carlo Menon
  2. The Value of a Right of First Refusal Clause in a Procurement First-Price Auction By Nathalie Chappe; Marie Obidzinski

  1. By: Silvia Giacomelli (Bank of Italy); Carlo Menon (OECD and Bank of Italy)
    Abstract: We investigate the causal relationship between judicial efficiency and firm size across Italian municipalities exploiting spatial discontinuities in court jurisdictions for identification. The estimated coefficients suggest that the reduction of the length of civil proceedings could exert, all other things being equal, a significant and positive effect on the average size of Italian firms. Results are robust to a number of different specifications, based on two different databases.
    Keywords: judicial efficiency, firm size, spatial discontinuity, Italy
    JEL: K4 L11 O18
    Date: 2013–01
  2. By: Nathalie Chappe (CRESE, Université de Franche-comté); Marie Obidzinski (CRESE, Université de Franche-comté)
    Abstract: The recent reforms of the "judicial map" in Europe have drastically reduced the number of courts, raising fears of a decline in access to justice. This paper addresses this issue through a litigation model within a Salop (1979) model. We assume that victims of accidents differ both in terms of compensatory damages expected and in terms of distance from court. Due to distance costs, it might be too expensive to file cases for some victims with low expected awards. Therefore, the demand for trials is reduced by a decrease in the number of courts when the probability of an accident is exogenous. However, the link between the number of courts and the demand for trials is not clear cut when the probability of an accident occurring is determined by the defendant through his level of care. Furthermore, we determine the optimal number of courts.
    Keywords: litigation, number of courts, distance costs, access to justice
    JEL: K41 H40
    Date: 2013–01

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