Table 5.
Impact of Judicial Reforms on Firm Productivity
(1)(2)(3)(4)(5)
Judicial reform $×$ Post 14.18 −0.08 −7.37 −4.90 −0.52
(12.02) (14.61) (14.28) (17.97) (15.32)
Judicial reform $×$ Post $×$ Specific 17.94*
(10.02)
Judicial reform $×$ Post $×$ Herfindhal Sweden  29.20*
(16.46)
Judicial reform $×$ Post $×$ Input/output Sweden   39.30**
(15.42)
Judicial reform $×$ Post $×$ Herfindhal Continent    34.64*
(17.93)
Judicial reform $×$ Post $×$ Input/output Continent     25.04
(17.60)
Observations 47,041 57,155 60,844 82,007 82,007
Country fixed effects Yes Yes Yes Yes Yes
Sector fixed effects Yes Yes Yes Yes Yes
Controls Yes Yes Yes Yes Yes
(1)(2)(3)(4)(5)
Judicial reform $×$ Post 14.18 −0.08 −7.37 −4.90 −0.52
(12.02) (14.61) (14.28) (17.97) (15.32)
Judicial reform $×$ Post $×$ Specific 17.94*
(10.02)
Judicial reform $×$ Post $×$ Herfindhal Sweden  29.20*
(16.46)
Judicial reform $×$ Post $×$ Input/output Sweden   39.30**
(15.42)
Judicial reform $×$ Post $×$ Herfindhal Continent    34.64*
(17.93)
Judicial reform $×$ Post $×$ Input/output Continent     25.04
(17.60)
Observations 47,041 57,155 60,844 82,007 82,007
Country fixed effects Yes Yes Yes Yes Yes
Sector fixed effects Yes Yes Yes Yes Yes
Controls Yes Yes Yes Yes Yes

OLS regressions. Robust standard errors in parentheses, clustered at the country level. ***$p<0.01$; **$p<0.05$; and *$p<0.1$. The dependent variable in all columns is the value added per worker, expressed in thousand U.S. dollars PPP. In column 1, Specific is a dichotomous variable equal to 1 if goods are specific, that is, it would take more than a month for the main customer to find the same good were the seller to shut down its operations. In column 2, Herfindhal Sweden is 1 minus the Herfindahl index for input use, that is, 1 minus the sum of shares of each of the nine inputs (labor, raw materials and intermediate inputs, electricity, communications services, fuel, transport for inputs, water, rental of land/buildings, equipment, furniture) among total input value to the squared, estimated for each sector disaggregated to the fourth digit of the ISIC code in Sweden. Firms are classified in the generic or specific sectors if their Herfindhal index is above or below the median. In column 3, “Input/Output Sweden” is the ratio of the total value of inputs used divided by the value of output, disaggregated for sectors at the four-digit level of the ISIC code in Sweden. Firms are classified in the generic or specific sectors if their input/output ratio is above or below the median. “Herfindhal Continent” and “Input/Output Continent” are defined similarly but instead of using Sweden as the benchmark country, I use data from the two countries with the best judiciaries in the same continent.

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