The impact of institutional and macroeconomic conditions on aggregate business bankruptcy

Sami ben Jabeur, Salma Mefteh-Wali and Pedro Carmona

Structural Change and Economic Dynamics, 2021, vol. 59, issue C, 108-119

Abstract: This paper investigates the aggregate business bankruptcy in relation to three macro-level factors: the government effectiveness, entrepreneurship activity and control of corruption for six European countries during the period from 2004 to 2017. We employ fuzzy-set qualitative comparative analysis (fsQCA) and partial least squares regression (PLS). Our findings show that countries with a high level of new firm creation and entrepreneurial activity can lead to a rise in the number of company failures. Furthermore, countries with a low corruption index and high levels of government effectiveness can mitigate insolvency. Our results have several policy implications for the evaluation and modification of the bankruptcy legal process.

Keywords: Government effectiveness; Entrepreneurship activity; Corruption; Failure; PLS regression; fsQCA (search for similar items in EconPapers)
Date: 2021
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Citations: View citations in EconPapers (1)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:streco:v:59:y:2021:i:c:p:108-119

DOI: 10.1016/j.strueco.2021.08.010

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