Before revision:  Our results suggest that recessions have a large impact on the trade network with meaningful and heterogeneous economic consequences across municipalities  .
After revision:  Our results suggest that recessions have a large impact on the trade network with meaningful and heterogeneous economic consequences across municipalities . We run econometric exercises and find that courts efficiency plays a dual role. From the customer perspective, it plays an important role in reducing contractual frictions as it increases economic transactions between different cities. From the supplier perspective, cities that are central suppliers to the supply chain seem to use courts inefficiency as a lawsuit barrier from their customers .