#11520. Judicial efficiency and loan performance: micro evidence from Serbia

August 2026publication date
Proposal available till 30-05-2025
4 total number of authors per manuscript0 $

The title of the journal is available only for the authors who have already paid for
Journal’s subject area:
Law;
Economics and Econometrics;
Business and International Management;
Places in the authors’ list:
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Contract №11520.1 Contract №11520.2 Contract №11520.3 Contract №11520.4
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4 place - free (for sale)

Abstract:
There is plenty of evidence that judicial efficiency reduces credit rationing and increases lending. In contrast, inefficient courts may lead to borrowers’ opportunistic behavior and, as a result, decrease loan performance and the availability of credit. We combine caseload data from commercial courts with micro-data on company loans to study the impact of judicial efficiency on loan performance. We document the presence of a robust negative relationship between the clearance rate and the number of days in arrears for companies from the districts under corresponding court jurisdictions. We use financial ratios, industry dummies and time fixed effects to control for the usual determinants of payment ability.
Keywords:
Clearance rate; Contract enforcement; Court efficiency; Credit market; Payment arrears

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