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Entrepreneurship and Information on Past Failures: A Natural Experiment

Christophe Cahn (), Mattia Girotti () and Augustin Landier

Working papers from Banque de France

Abstract: 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
Date: 2017
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) Downloads
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