TY  - JOUR
AU  - Horioka,Charles Yuji
AU  - Sekita,Shizuka
TI  - The Degree of Judicial Enforcement and Credit Markets: Evidence from Japanese Household Panel Data
JF  - National Bureau of Economic Research Working Paper Series
VL  - No. 15631
PY  - 2010
Y2  - January 2010
UR  - http://www.nber.org/papers/w15631
L1  - http://www.nber.org/papers/w15631.pdf
N1  - Author contact info:
Charles Y. Horioka
Institute of Social and Economic Research
Osaka University
6-1 Mihogaoka, Ibaraki-shi
Osaka-fu 567-0047
JAPAN
Tel: 81-6-6879-8586
Fax: 81-6-6878-2766
E-Mail: horioka@iser.osaka-u.ac.jp

Shizuka Sekita
Institute of Social and Economic Research
Osaka University
6-1, Mihogaoka, Ibaraki, Osaka 567-0047, JAPAN
E-Mail: sekita@iser.osaka-u.ac.jp
AB  - In this paper, we conduct an empirical analysis of the impact of better judicial enforcement on the probability of being credit rationed, loan size, and the probability of bankruptcy using household-level data from the Japanese Panel Survey of Consumers, conducted by the Institute for Research on Household Economics, in conjunction with judicial data by court district on trial length and the ratio of the number of pending civil trials to the number of incoming civil trials.  Contrary to the predictions of the existing theory, we find that better judicial enforcement increases the probability of being credit rationed and decreases loan size.  Furthermore, we find that better judicial enforcement increases the probability of bankruptcy, a result that is consistent with lax screening effects.
ER  -