Impact of State Exemption Laws on Small Business Bankruptcy Decision

Sumit Agarwal (), Souphala Chomsisengphet (), Chunlin Liu () and Lawrence Mielnicki ()
Additional contact information
Souphala Chomsisengphet: Risk Analysis Division, Office of the Comptroller of Currency
Chunlin Liu: College of Business Administration, University of Nevada, Reno
Lawrence Mielnicki: De Lage Landen Financial Services

Southern Economic Journal, 2005, vol. 71, issue 3, pages 620-635

Abstract: To provide further insights into the current debate on consumer bankruptcy, this article empirically assesses the impact of state bankruptcy exemption levels on the likelihood of small business owners filing for bankruptcy. We estimate a proportional hazard model of small business bankruptcy using a unique panel data set of over 43,000 small business credit card holders over a two-year period from May 2000 to May 2002. Overall, our results indicate that for every $10,000 increase in a state's homestead exemptions, the risk of small business bankruptcy increases by 8%. Moreover, we also find that the likelihood of small business owners filing for bankruptcy will rise by 4% with a $1000 increase in personal property exemption levels.

JEL-codes: G21 G33 J41 (search for similar items in EconPapers)
Date: 2005
View citations in EconPapers

There are no downloads for this item, see the EconPapers FAQ for hints about obtaining it.

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: http://EconPapers.repec.org/RePEc:sej:ancoec:v:71:3:y:2005:p:620-635

Access Statistics for this article

Southern Economic Journal is edited by Laura Razzolini

More articles in Southern Economic Journal from Southern Economic Association
Contact information at EDIRC.
Series data maintained by Laura Razzolini ().