Medieval Universities, Legal Institutions, and the Commercial Revolution

94 Pages Posted: 13 Nov 2013

See all articles by Davide Cantoni

Davide Cantoni

Ludwig Maximilian University of Munich (LMU) - Faculty of Economics

Noam Yuchtman

University of California, Berkeley - Haas School of Business

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Date Written: October 31, 2013

Abstract

We present new data documenting medieval Europe’s “Commercial Revolution” using information on the establishment of markets in Germany. We use these data to test whether medieval universities played a causal role in expanding economic activity, examining the foundation of Germany’s first universities after 1386 following the Papal Schism. We find that the trend rate of market establishment breaks upward in 1386 and that this break is greatest where the distance to a university shrank most. There is no differential pre-1386 trend associated with the reduction in distance to a university, and there is no break in trend in 1386 where university proximity did not change. These results are robust to estimating a variety of specifications that address concerns about the endogeneity of university location. Universities provided training in newly-rediscovered Roman and canon law; students with legal training served in positions that reduced the uncertainty of trade in the Middle Ages. We argue that training in the law, and the consequent development of legal and administrative institutions, was an important channel linking universities and greater economic activity in medieval Germany.

Keywords: human capital, historical development, legal institutions

JEL Classification: I250, N130, N330, O100

Suggested Citation

Cantoni, Davide and Yuchtman, Noam, Medieval Universities, Legal Institutions, and the Commercial Revolution (October 31, 2013). CESifo Working Paper Series No. 4452, Available at SSRN: https://ssrn.com/abstract=2353301 or http://dx.doi.org/10.2139/ssrn.2353301

Davide Cantoni (Contact Author)

Ludwig Maximilian University of Munich (LMU) - Faculty of Economics ( email )

Ludwigstrasse 28
Munich, D-80539
Germany

Noam Yuchtman

University of California, Berkeley - Haas School of Business ( email )

545 Student Services Building, #1900
2220 Piedmont Avenue
Berkeley, CA 94720
United States

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