Small Business Bankruptcy
Michelle J. White ()
Additional contact information
Michelle J. White: Department of Economics, University of California, San Diego, La Jolla, California 92093
Annual Review of Financial Economics, 2016, vol. 8, issue 1, 317-336
Abstract:
Bankruptcy is the legal process by which financially distressed firms and individuals resolve their debts. It is an important part of the legal environment for small business owners and their lenders because small businesses are very risky and often fail and because bankruptcy law affects how business owners and their lenders are treated in the event of failure. Both personal and corporate bankruptcy law are relevant for most small businesses, as even when businesses are incorporated, lenders often require that business owners personally guarantee loans to the business. This article discusses theoretical models and empirical tests of how bankruptcy law affects small business, including the effects of bankruptcy law on incentives to start and remain in business, how bankruptcy law affects small business credit, and whether bankruptcy law leads to efficient decisions concerning whether failing businesses reorganize or liquidate. Research using small business data from both the United States and other countries is covered in this survey.
Keywords: financial distress; corporate bankruptcy; personal bankruptcy; liquidation; reorganization; fitting failure; fresh start; debt discharge (search for similar items in EconPapers)
JEL-codes: G33 (search for similar items in EconPapers)
Date: 2016
References: Add references at CitEc
Citations: View citations in EconPapers (6)
Downloads: (external link)
http://www.annualreviews.org/doi/10.1146/annurev-financial-121415-032856 (application/pdf)
Full text downloads are only available to subscribers. Visit the abstract page for more information.
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: https://EconPapers.repec.org/RePEc:anr:refeco:v:8:y:2016:p:317-336
Ordering information: This journal article can be ordered from
http://www.annualreviews.org/action/ecommerce
Access Statistics for this article
More articles in Annual Review of Financial Economics from Annual Reviews Annual Reviews 4139 El Camino Way Palo Alto, CA 94306, USA.
Bibliographic data for series maintained by http://www.annualreviews.org ().