NATIONAL BUREAU OF ECONOMIC RESEARCH
NATIONAL BUREAU OF ECONOMIC RESEARCH

Ana Costa

E-Mail: anacosta@tendencias.com.br

NBER Working Papers and Publications

March 2008Judicial Risk and Credit Market Performance: Micro Evidence from Brazilian Payroll Loans
with João M. P. De Mello
in Financial Markets Volatility and Performance in Emerging Markets, Sebastian Edwards and Márcio G. P. Garcia, editors
May 2006Judicial Risk and Credit Market Performance: Micro Evidence from Brazilian Payroll Loans
with Joao M.P. De Mello: w12252
A large body of literature has stressed the institution-development nexus as critical in explaining differences in countries%u2019 economic performance. The empirical evidence, however, has been mainly at the aggregate level, associating macro performance with measures of quality of institutions. This paper, by relating a judicial decision on the legality of payroll loans in Brazil to bank-level decision variables, provides micro evidence on how creditor legal protection affects market performance. Payroll loans are personal loans with principal and interests payments directly deducted from the borrowers%u2019 payroll check, which, in practice, makes a collateral out of future income. In June 2004, a high-level federal court upheld a regional court ruling that had declared payroll deductio...

Published: Judicial Risk and Credit Market Performance: Micro Evidence from Brazilian Payroll Loans, Ana Carla A. Costa, João M. P. De Mello. in Financial Markets Volatility and Performance in Emerging Markets, Edwards and Garcia. 2008

 
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