The Economic Impact of Rescue and Recovery Frameworks in the EU

Mihaela Carpus Carcea, Daria Ciriaci, Dimitri Lorenzani, Peter Pontuch and Carlos Cuerpo

No 4, European Economy - Discussion Papers from Directorate General Economic and Financial Affairs (DG ECFIN), European Commission

Abstract: This paper provides empirical support to the important role of efficient pre-insolvency frameworks in fostering a culture of early restructuring and second chances in EU Member States and the positive impact that this has on entrepreneurship, as well as the timeliness and cost of corporate and household deleveraging. The analysis is based on a set of composite indicators measuring specific efficiency aspects of rescue and recovery frameworks. These were built using principal component analysis applied on a comparison of the legal provisions they encompass. Econometric analysis carried out on the basis of these indicators suggests that, across the EU, efficient pre-insolvency frameworks are positively associated with relatively higher levels of entrepreneurship and deleveraging episodes with a relatively milder impact on financial stability and economic activity.

JEL-codes: C23 D02 G33 K20 K35 (search for similar items in EconPapers)
Pages: 32 pages
Date: 2015-09
New Economics Papers: this item is included in nep-sbm
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Citations: View citations in EconPapers (9)

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Persistent link: https://EconPapers.repec.org/RePEc:euf:dispap:004

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