The law often lays down mandatory rules, from which the parties may deviate in favor of one party but not the other. Examples include the invalidation of high liquidated damages and the unenforceability of excessive non-compete clauses in employment contracts. In these cases, the law may...

Transaction costs are a major reason why international trade flows are much smaller than traditional trade theory would suggest. Trust between trading partners lowers transaction costs and may therefore enhance trade. The empirical analysis of this paper shows that more trust leads to more trade...

Credit contract enforcement influences financial market allocations and prices. Well-functioning credit markets enable firms to finance their operations. Can greater judicial efficiency therefore help to improve credit market allocations, by increasing firm dynamism and boosting aggregate...

This article develops and tests a theory of the institutions that make property rights viable, ensuring their enforcement, mobilizing the collateral value of assets and promoting growth. In contrast to contractual rights, property rights are enforced in rem, being affected only with the consent...

This paper provides new evidence on the contractual governance of technology licensing agreements. Based upon an international sample of licensing contracts, we explore how the contractual design deals with specific contractual hazards. In particular, we comparatively assess the influences of...

We develop and test a model of mortgage underwriting, with particular reference to the role of credit bureau scores. In our model scores are used in a standardized fashion, which reflects the prevalence of automated underwriting in industry practice. We show that our model has implications for...

This paper investigates variation in the cost of equity capital for the Southeast Asian countries using firm-level data over the period of 1990-2004. It is found that decreases in the firm-level cost of equity capitall have been associated with stock market liberalization and securities market...