The Law and Economics of Corporate Insolvency: A Review

John Armour

Working Papers from Centre for Business Research, University of Cambridge

Abstract: Law and economics scholarship has contributed greatly to our understanding of corporate insolvency law. This paper provides an overview of this literature. It begins by defining some relevant terminology, and then reviews theories about the goals of insolvency law. It then considers Jackson's well-known claim that insolvency law exists as a response to a common pool problem, and continues by looking at suggestions for reducing the costs of financial distress both ex post and ex ante. Finally, it asks whether a solution to the common pool problem might not be sought through contract, or indeed through reliance on social norms.

Keywords: law and economics; corporate insolvency; financial distress; social norms (search for similar items in EconPapers)
JEL-codes: G33 G38 K22 Z13 (search for similar items in EconPapers)
Date: 2001-03
New Economics Papers: this item is included in nep-law
Note: PRO-2
References: Add references at CitEc
Citations: View citations in EconPapers (13)

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Persistent link: https://EconPapers.repec.org/RePEc:cbr:cbrwps:wp197

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