How much should debtors be punished in case of default?
Aloisio Araujo and
Bruno Funchal ()
No 41, Fucape Working Papers from Fucape Business School
This study investigates the relationship between debtor punishment and the development of the credit market. We empirically analyze how the level of debtor punishment relates to the credit market expansion. We find evidence that an increase in debtor punishment tends to produce a positive effect on credit markets for states with low level of punishment and a negative effect for states with high level of punishment. Hence, there is an intermediate level of debtor punishment that maximizes the size of the personal credit market. This intermediate level accounts for the need of creditors' protection to reduce moral hazard, to encourage the supply of credit, and for the need to protect borrowers from a bad state of nature
Keywords: Credit; bankruptcy; regulation and business law; personal bankruptcy law (search for similar items in EconPapers)
Pages: 30 pages
New Economics Papers: this item is included in nep-ban and nep-law
References: View references in EconPapers View complete reference list from CitEc
Citations: Track citations by RSS feed
Published in Fucape Working Papers, Outubro 2013
Downloads: (external link)
http://www.fucape.br/_public/workingpapers/41-2013.pdf Primeira Versão, 2013 (application/pdf)
Our link check indicates that this URL is bad, the error code is: 404 Not Found (http://www.fucape.br/_public/workingpapers/41-2013.pdf [301 Moved Permanently]--> http://fucape.br/_public/workingpapers/41-2013.pdf [301 Moved Permanently]--> https://fucape.br/_public/workingpapers/41-2013.pdf)
Journal Article: How Much Should Debtors be Punished in Case of Default? (2015)
This item may be available elsewhere in EconPapers: Search for items with the same title.
Export reference: BibTeX
RIS (EndNote, ProCite, RefMan)
Persistent link: https://EconPapers.repec.org/RePEc:bbz:fcpwps:41
Access Statistics for this paper
More papers in Fucape Working Papers from Fucape Business School Fucape Business School Brazilian Business Review Av. Fernando Ferrari, 1358, Boa Vista CEP 29075-505 Vitória-ES. Contact information at EDIRC.
Bibliographic data for series maintained by Adriana Gasparino ().