{'fraction_non_alphanumeric': 0.016081000595592615, 'fraction_numerical': 0.0, 'mean_word_length': 5.486486486486487, 'pattern_counts': {'":': 0, '<': 0, '<?xml version=': 0, '>': 0, 'https://': 0, 'lorem ipsum': 0, 'www.': 0, 'xml': 0}, 'pii_count': 0, 'substrings_counts': 0, 'word_list_counts': {'cursed_substrings.json': 0, 'profanity_word_list.json': 0, 'sexual_word_list.json': 0, 'zh_pornsignals.json': 0}}
Caste, Courts and Business

The growth of business, especially small and medium scale enterprises are critical for employment generation in less developed countries. This study seeks to identify the role of the institutions of contract enforcement for business performance. Specifically, this paper, using a nationally representative survey data from India, estimates on the impact of improvements in court quality on the business outcomes of small, medium and micro entrepreneurs. We develop a theoretical model where we show that improvement in court quality help the entrepreneurs without business network ties disproportionately more. The improvements in the formal court system become more critical for these entrepreneurs as the other group of entrepreneurs – those with network ties -- can enforce contract informally using their network ties. We test our theoretical prediction using a novel administrative data from Indian courts and national level survey data on medium, small and micro enterprises from India. For lack of any better information on business network, in our empirical work, we treat entrepreneurs from disadvantaged castes (SC/ST) as entrepreneurs without business network ties as these castes are not considered as entrepreneurial castes in the traditional scheme of caste hierarchy. We find that improvements in the court quality have disproportionately bigger impact on the business performances of SC/ST entrepreneurs. Moreover, the effect of formal judiciary is stronger in districts where people from disadvantaged castes are minority or they do not have political representation. Our result holds for alternative measures of business performance.