Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/51465
Authors: 
Chong, Alberto
Gradstein, Mark
Year of Publication: 
2006
Series/Report no.: 
Working paper // Inter-American Development Bank, Research Department 584
Abstract: 
This paper revisits the effects of a country's institutional framework on individual firms' behavior, in particular focusing on their propensity to comply with legal rules. The theoretical model presented here suggests that these effects may be of paramount significance-contrary to the recently popularized paradigm arguing that differences across countries have ceased to matter much. This paper's empirical strategy consists of explaining the variation in measures of noncompliance with legal rules and employs a rich dataset based on thousands of firms from dozens of countries. We find that most of the variation emanates from country-wide differences in institutional quality, although some firm characteristics play a role as well. Our conclusion is that countries still matter in providing institutional infrastructure, which determines to a large extent the context within which firms operate.
Subjects: 
Firms
Institutions
Law compliance
Country differences
Globalization
JEL: 
D21
K42
O17
O57
Document Type: 
Working Paper

Files in This Item:
File
Size
136.36 kB





Items in EconStor are protected by copyright, with all rights reserved, unless otherwise indicated.