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

摘要

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.