This paper contributes to the literature on family firms in two ways. First, it focuses on a largely neglected but important issue of family firms’ investment decisions. Second, it uses a novel and rich data set about Italian private firms; this complements the literature, which typically...

The cost of enforcing contracts is a key determinant of market performance. We document this point with reference to the credit market in a model of opportunistic debtors and inefficient courts. According to the model, improvements in judicial efficiency should reduce credit rationing and...