A 'De Soto Effect' in Industry? Evidence from the Russian Federation

Posted: 16 Oct 2014

See all articles by Alexei Karas

Alexei Karas

Utrecht University, University College Roosevelt; Utrecht University School of Economics; Centre for Russian International Socio-Political and Economic Studies (CERISE)

William Pyle

Middlebury College - Department of Economics

Koen J. L. Schoors

Ghent University - Centre for Russian International Socio-Political and Economic Studies (CERISE); Ghent University - Department of General Economics

Date Written: October 16, 2014

Abstract

The strengthening of land rights has been proposed as a policy to reduce financial market frictions and promote private investment in low and middle income countries. But assessments of these potential effects have proven inconclusive. One reason may be that research has focused on actors that face difficulties accessing credit for reasons other than the security of land tenure. We explore the effect of greater tenure security in a setting in which non-land-related financial market frictions are apt to be mild – that is, among large, urban, industrial enterprises. Exploiting policy variation across Russian regions and firm-level survey data, we show that private land rights facilitate credit access and promote investment.

Keywords: Private land tenure, access to credit, De Soto effect

JEL Classification: D23, O16, P26

Suggested Citation

Karas, Alexei and Pyle, William and Schoors, Koen J. L., A 'De Soto Effect' in Industry? Evidence from the Russian Federation (October 16, 2014). Journal of Law and Economics, Forthcoming, Available at SSRN: https://ssrn.com/abstract=2510710

Alexei Karas

Utrecht University, University College Roosevelt ( email )

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William Pyle (Contact Author)

Middlebury College - Department of Economics ( email )

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Koen J. L. Schoors

Ghent University - Centre for Russian International Socio-Political and Economic Studies (CERISE) ( email )

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Ghent, 9000
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Ghent University - Department of General Economics ( email )

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Ghent, 9000
Belgium
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+32 9 264 35 99 (Fax)

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