Do liquidation trustee characteristics matter for firm liquidation outcomes? Evidence from Slovenia

Jaka Cepec, Peter Grajzl and Katarina Zajc

Economic Systems, 2017, vol. 41, issue 4, 591-609

Abstract: We investigate whether insolvency outcomes depend on the characteristics of the trustee entrusted with the administration of insolvency proceedings. To this end, we draw on a novel dataset of firm liquidations from Slovenia and exploit courts’ de facto random assignment of firm liquidation cases to licensed liquidation trustees. We find that only a subset of the observed liquidation trustee characteristics matters for only a subset of examined firm liquidation outcomes. The trustee’s experience affects the length of proceedings. While the effect is identified off of a small number of observations, the subject of the trustee’s education influences the prospects for, but not the amount of, creditors’ debt recovery. The trustee’s gender, attained level of education, and repeated match with a specific judge exhibit no robust effect on either debt recovery or the length of proceedings. We discuss the broader implications of our results.

Keywords: Insolvency; Firm liquidations; Debt recovery; Duration; Liquidation trustees; Slovenia (search for similar items in EconPapers)
JEL-codes: G33 K22 P37 (search for similar items in EconPapers)
Date: 2017
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Citations: View citations in EconPapers (3)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:ecosys:v:41:y:2017:i:4:p:591-609

DOI: 10.1016/j.ecosys.2017.05.002

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