Open AccessLaw Enforcement Proxies Matter for the Law and Finance Nexus
Author(s) -
Valentin Toçi,
Iraj Hashi
Publication year - 2013
Publication title -
international journal of finance and banking studies
Language(s) - English
Resource type - Journals
ISSN - 2147-4486
DOI - 10.20525/ijfbs.v2i3.154
Subject(s) - nexus (standard) , creditor , enforcement , context (archaeology) , law enforcement , law , commercial law , business , economics , finance , political science , debt , geography , archaeology , computer science , embedded system
The paper employs various measures of law enforcement to provide new evidence on the importance of legal institutions for different dimensions of financial development in transition economies. It offers a critical assessment of law enforcement measures employed in recent studies by showing that some proxies for law enforcement in the credit market may not be appropriate. Hence, care should be taken in how the quality of institutions is measured and the context which it represents. An original approach to measuring law enforcement in the credit market is developed by embodying the legal theory of dispute resolution and assessing this approach by collecting primary data for Kosovo. The findings suggest that Kosovo compares well with countries in the region andother transition economies in terms of the enforcement of creditor rights.