DEPARTMENT OF ECONOMICS invites you to a talk by DR. TANIKA CHAKRABORTY, IIT Kanpur and IZA Bonn


"Formal Contract Enforcement and Entrepreneurial Success of the Marginalized"


Dr. Tanika Chakraborty is an Assistant Professor at the Department of Humanities and Social Sciences at Indian Institute of Technology (IIT) - Kanpur and a Research Fellow with the Institute for the Study of Labor (IZA) - Bonn, Germany. She has a PhD in Economics from Washington University - St Louis, USA and did her post-graduate studies in Economics from Jawaharlal Nehru University in New Delhi. Prior to joining IIT Kanpur, she was associated with the German Institute for Economic Research (DIW), Berlin. Her research areas are Development Economics, Economics of Education, Labor Economics and Applied Econometrics.


In this talk she highlights that judicial efficiency plays a critical role for business proliferation by facilitating contracts. She and her co-authors examine the effect of judicial efficiency on different types firm level decisions which have important implications for a firm's efficiency. Their working hypothesis suggests that in districts with more efficient judiciary system, firms will find it more convenient to operate at the optimal scale. This hypothesis may sound a little trivial, it is not at least in the case of the less developed countries where the lack of trust in formal courts is pervasive and the use of informal institutions is ubiquitous. Her paper is related to two newly emerging strands of literature. The first one looks at the effect of contracting institutions on trade and technology adoption and explains cross country difference in development through these channels. Her paper is also related to the research on of court efficiency and business performance in India. The major predicament that the researchers faced while working on the Indian case is the availability of data. The published data they have got from official sources are state level data for a very few years. In this backdrop, the contribution of their work is twofold. First, they collect data directly from different district level courts. It provides them information on the number of case admissions, cases resolved and cases pending at the end of different years. Second, they use the data to find whether court efficiency helps scheduled caste/scheduled tribe and women more than their general caste counterpart. The findings suggest that improving formal court helps socially disadvantaged groups, such as women and SC/ST, significantly more in starting and sustaining business activities significantly.