Does Merging Small Bankruptcy Courts Increase Their Efficiency?

Anne Epaulard and Chloé Zapha
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Chloé Zapha: LEDa - Laboratoire d'Economie de Dauphine - IRD - Institut de Recherche pour le Développement - Université Paris Dauphine-PSL - PSL - Université Paris Sciences et Lettres - CNRS - Centre National de la Recherche Scientifique

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Abstract: We estimate the impact of a 2009 reform that merged small bankruptcy courts on the qualityof their rulings. A conceptual framework enables us to link difference-in-difference estimatesto the impact of the reform on Type 1 errors (restructuring a non-viable firm) and Type 2errors (liquidating a viable firm). We apply this framework to an (almost) exhaustive sampleof 600,000 bankruptcy cases in France that started between 2000 and 2019. The reformunambiguously reduces Type 1 errors while having no impact on Type 2 errors. Post-mergercourt behavior is determined more by that of the absorbing court than by that of theabsorbed one.

Keywords: Corporate Bankruptcy; Commercial Courts (search for similar items in EconPapers)
Date: 2026-02-04
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Working Paper: Does Merging Small Bankruptcy Courts Increase Their Efficiency? (2026)
Working Paper: Does Merging Small Bankruptcy Courts Increase Their Efficiency? (2025)
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