Determinants of the Choice of Formal Bankruptcy Procedure: An International Comparison of Reorganization and Liquidation

Chien-An Wang

Emerging Markets Finance and Trade, 2012, vol. 48, issue 2, 4-28

Abstract: Application of a logit regression model to 555 bankruptcy filings from 30 countries from 1993 to 2009 provides insight into the factors that determined the outcomes of two formal bankruptcy resolution procedures, reorganization, and liquidation. The evidence shows that the judicial efficiency of debt enforcement had greater effects on the reorganization choice than the formalism on debtor rights written in the law books had. A higher bank debt ratio did not necessarily favor liquidation over reorganization, and creditors relied on the future value of the viable firm and judicial efficiency to decide between reorganization and liquidation. The results highlighted that the bankruptcy code and its enforceability efficiency were the causes of the variability in formal bankruptcy outcomes.

Keywords: bankruptcy; judicial efficiency; liquidation; reorganization (search for similar items in EconPapers)
Date: 2012
References: Add references at CitEc
Citations: View citations in EconPapers (9)

Downloads: (external link)
http://mesharpe.metapress.com/link.asp?target=contribution&id=B4R76T600H078780 (text/html)
Access to full text is restricted to subscribers.

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:mes:emfitr:v:48:y:2012:i:2:p:4-28

Ordering information: This journal article can be ordered from
http://www.tandfonline.com/pricing/journal/MREE20

Access Statistics for this article

More articles in Emerging Markets Finance and Trade from Taylor & Francis Journals
Bibliographic data for series maintained by Chris Longhurst ().