Entrepreneurship and Information on Past Failures: A Natural Experiment
Christophe Cahn (),
Mattia Girotti () and
Working papers from Banque de France
We analyze how public information on past entrepreneurial failure affects entrepreneurs’ ability to borrow. We exploit a policy shock from 2013 in France, which eliminated a highly salient public reporting to banks of managers involved in non-fraudulent corporate liquidations. We find that the flag removal makes failed entrepreneurs significantly more likely to restart a business or to borrow from a surviving business, despite the fact that bankers can find the failure information from other public sources for a small cost. Restarters create companies that have a higher probability of default.
Keywords: Entrepreneurship; Access to credit; Bankruptcy. (search for similar items in EconPapers)
JEL-codes: G33 L26 (search for similar items in EconPapers)
Pages: 52 pages
New Economics Papers: this item is included in nep-cfn, nep-ent and nep-sbm
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Journal Article: Entrepreneurship and information on past failures: A natural experiment (2021)
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Persistent link: https://EconPapers.repec.org/RePEc:bfr:banfra:644
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