Bankruptcy around the World: Explanations of Its Relative Use
Stijn Claessens () and
Leora Klapper ()
American Law and Economics Review, 2005, vol. 7, issue 1, 253-283
The law and finance literature highlights the role of investor rights in financial development, firm corporate governance, and financing patterns. For a panel of 35 countries, we investigate how bankruptcy use relates to countries' creditor rights and judicial efficiency. Bankruptcies are higher in countries with more creditor rights, except for a "no automatic stay on assets" provision. Higher judicial efficiency is associated with more bankruptcies and appears as a substitute with more creditor rights. Although only a first step, our findings suggest creditor rights are complex, balancing prioritization of claims, ex ante risk-taking incentives, and an efficient resolution of distressed firms. Copyright 2005, Oxford University Press.
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Working Paper: Bankruptcy around the World: Explanations of its Relative Use (2002)
Working Paper: Bankruptcy around the world - explanations of its relative use (2002)
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