Legal environment and corporate finance: evidence from the Italian manufacturing industry

Greta Falavigna and Roberto Ippoliti

Journal of Economic Structures, 2021, vol. 10, issue 1, 1-16

Abstract: Abstract Considering the Italian manufacturing industry between 2014 and 2016 (more than 250,000 observations), this technical note analyzes the relation between the courts’ ability to enforce credit rights and the opportunity to finance business activities with trade credits instead of financial debts, delaying payments and decreasing the financial costs. According to our results, and considering mortgage foreclosure, if the time necessary to settle an insolvency case increases by 1000 days, we can expect an increase in operating debt between 3 and 11%, and a decrease of financial expenses between 3000 and 7000 Euro.

Keywords: Manufacturing industry; Corporate finance; Institutional inefficiency (search for similar items in EconPapers)
JEL-codes: G32 G33 (search for similar items in EconPapers)
Date: 2021
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

Downloads: (external link)
http://link.springer.com/10.1186/s40008-021-00252-6 Abstract (text/html)

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:spr:jecstr:v:10:y:2021:i:1:d:10.1186_s40008-021-00252-6

Ordering information: This journal article can be ordered from
http://www.springer.com/economics/journal/40008

DOI: 10.1186/s40008-021-00252-6

Access Statistics for this article

Journal of Economic Structures is currently edited by Shigemi Kagawa and Kazuhiko Nishimura

More articles in Journal of Economic Structures from Springer, Pan-Pacific Association of Input-Output Studies (PAPAIOS) Contact information at EDIRC.
Bibliographic data for series maintained by Sonal Shukla () and Springer Nature Abstracting and Indexing ().