Does Merging Small Bankruptcy Courts Increase Their Efficiency?

Anne Epaulard and Chloé Zapha

Working papers from Banque de France

Abstract: We estimate the impact of a 2009 reform that merged small bankruptcy courts on the quality of their rulings. A conceptual framework enables us to link difference-in-difference estimates to the impact of the reform on Type 1 errors (restructuring a non-viable firm) and Type 2 errors (liquidating a viable firm). We apply this framework to an (almost) exhaustive sample of 600,000 bankruptcy cases in France that started between 2000 and 2019. The reform unambiguously reduces Type 1 errors while having no impact on Type 2 errors. Post-merger court behavior is determined more by that of the absorbing court than by that of the absorbed one.

Keywords: Corporate Bankruptcy; Commercial Courts (search for similar items in EconPapers)
JEL-codes: G33 K22 (search for similar items in EconPapers)
Pages: 37 pages
Date: 2025
New Economics Papers: this item is included in nep-cfn and nep-law
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Persistent link: https://EconPapers.repec.org/RePEc:bfr:banfra:1015

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