Design of insolvency regimes across countries
Muge Adalet and
No 1504, OECD Economics Department Working Papers from OECD Publishing
This paper explores cross-country differences in the design of insolvency regimes, based on quantitative indicators constructed from countries’ responses to a recent OECD policy questionnaire. The indicators – which are available for 36 countries for 2010 and 2016 – aim to better capture the key design features of insolvency which impact the timely initiation and resolution of personal and corporate insolvency proceedings. According to these metrics, the design of insolvency regimes varies significantly across countries, with important differences emerging with respect to the treatment of failed entrepreneurs, the availability of preventative and streamlining tools and ease of corporate restructuring. While a comparison of indicator values for 2010 and 2016 imply that recent reform efforts have improved policy design, there remains much scope to reform insolvency regimes in many OECD countries. This is particularly significant in light of complementary analysis which shows that the design of insolvency regimes is relevant for understanding three inter-related sources of contemporary labour productivity weakness: the survival of “zombie” firms, capital misallocation and stalling technological diffusion.
Keywords: capital misallocation; firm exit; personal and corporate insolvency; productivity; zombie firms (search for similar items in EconPapers)
JEL-codes: D24 K35 O40 O43 O47 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-eff, nep-ent and nep-eur
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Persistent link: https://EconPapers.repec.org/RePEc:oec:ecoaaa:1504-en
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