Judicial Independence and US State Bond Ratings: An Empirical Investigation

Forthcoming at Public Budgeting & Finance

32 Pages Posted: 21 Feb 2015 Last revised: 6 Nov 2016

See all articles by John A. Dove

John A. Dove

Troy University - Manuel H. Johnson Center for Political Economy

Multiple version iconThere are 2 versions of this paper

Date Written: November 1, 2016

Abstract

Significant research has assessed how judicial independence influences a number of economic outcomes, however less has been done to evaluate how financial institutions perceive an independent judiciary. Therefore, this paper considers how greater judicial independence across US states may affect state bond ratings. Overall, the results suggest that states with relatively more independent judiciaries do in fact have higher bond ratings, which translates into lower borrowing costs. The results are robust to a number of specifications and suggest the role that an independent judiciary plays in contract enforcement along with several other important implications for future research.

Keywords: Judicial Independence, Sovereign Debt, Default, Bond Ratings, Contract Enforcement

JEL Classification: D78, G20, H11, H73, K12

Suggested Citation

Dove, John A., Judicial Independence and US State Bond Ratings: An Empirical Investigation (November 1, 2016). Forthcoming at Public Budgeting & Finance. Available at SSRN: https://ssrn.com/abstract=2567513 or http://dx.doi.org/10.2139/ssrn.2567513

John A. Dove (Contact Author)

Troy University - Manuel H. Johnson Center for Political Economy ( email )

Bibb Graves Hall
Troy, AL 36082
United States

Register to save articles to
your library

Register

Paper statistics

Downloads
52
Abstract Views
462
rank
376,361
PlumX Metrics