Judicial Quality, Input Customisation, and Trade Margins: The Role of Product Quality
研究了司法质量如何通过影响投入品定制和产品质量升级，改变一国的贸易模式，发现更好的司法质量会提高合同密集型产品的进口价格和质量，但对出口无显著影响。
Abstract We study how the contracting environment affects the quality of trade. A better contracting environment not only induces specialisations in industries intensively using customised inputs, but also causes quality upgrading of domestic varieties and tougher competition in these industries. We incorporate these effects into a Ricardian model with customised input and product quality. Our model predicts that better judicial quality raises a country’s import prices and quality more in contract-intensive products, but has no impacts on its export prices or quality. We empirically confirm these predictions and find that rising judicial quality is associated with increasing specialisations in contract-intensive industries.