Bankruptcy Around the World: Explanations of its Relative Use
The recent literature on law and finance has drawn attention to the importance of creditor rights in influencing the development of financial systems and in affecting firm corporate governance and financing patterns. Recent financial crises have al...
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| Format: | Policy Research Working Paper |
| Language: | English en_US |
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World Bank, Washington, D.C.
2013
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| Online Access: | http://documents.worldbank.org/curated/en/2002/07/1963446/bankruptcy-around-world-explanations-relative-use http://hdl.handle.net/10986/14259 |
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okr-10986-142592021-04-23T14:03:20Z Bankruptcy Around the World: Explanations of its Relative Use Claessens, Stijn Klapper, Leora F. ACCOUNTING ASIAN DEVELOPMENT BANK ASSETS BANK LOANS BANKRUPTCY BANKRUPTCY CODE BANKRUPTCY COURTS BANKRUPTCY LAW BANKRUPTCY LAWS BANKRUPTCY PROCEDURES BANKRUPTCY PROCEEDINGS BORROWING CAPITAL MARKETS CIVIL LAW COMMON LAW CORPORATE FINANCE CORRUPTION COUNTRY COMPARISONS CREDITOR CREDITORS DEBT RESTRUCTURING DEBTOR DEBTORS DEFAULTS DISTRIBUTION OF WEALTH DIVIDEND PAYOUT DOMESTIC DEBT ECONOMIC DEVELOPMENT ECONOMIC RESEARCH EMPLOYMENT ENTREPRENEURSHIP EQUALITY EQUITY INVESTMENT EQUITY MARKETS FINANCIAL CRISES FINANCIAL CRISIS FINANCIAL INSTITUTIONS FINANCIAL MARKETS FINANCIAL STRUCTURE FINANCIAL SYSTEMS FIXED COSTS GDP GDP PER CAPITA GOING CONCERN VALUE GROWTH RATE INCENTIVE EFFECTS INHERITANCE INSOLVENCY INTEREST RATES LAW CODES LEGAL FRAMEWORK LEGAL RIGHTS LEGAL SYSTEMS LEGALITY LIQUIDATION MACROECONOMIC CONDITIONS MACROECONOMIC PERFORMANCE MACROECONOMIC SHOCKS POLITICAL ECONOMY PROBABILITY OF DEFAULT PROFITABILITY QUALITY OF LAWS REAL GDP REAL INTEREST RATE REORGANIZATION REPUDIATION RESOURCE ALLOCATION RULE OF LAW SYSTEMIC BANKING CRISES TIME SERIES TRANSACTION COSTS TRANSITION ECONOMIES VALUATION WORKING CAPITAL BANKRUPTCY FINANCIAL SYSTEMS CREDITWORTHINESS FINANCIAL ANALYSIS LEGAL FRAMEWORK CORPORATE GOVERNANCE FINANCIAL CRISES INSOLVENCY JUDICIAL SYSTEMS FINANCIAL DEVELOPMENT MACROECONOMIC SHOCKS MARKET ECONOMY BANKING SYSTEMS The recent literature on law and finance has drawn attention to the importance of creditor rights in influencing the development of financial systems and in affecting firm corporate governance and financing patterns. Recent financial crises have also highlighted the importance of insolvency systems to resolve corporate sector financial distress. The literature and crises have emphasized the complex role of creditor rights, affecting not only the efficiency of ex-post resolution of distressed corporations, but also influencing ex-ante risk-taking incentives and an economy's degree of entrepreneurship more generally. The authors document how often bankruptcy is actually being used for a panel of 35 countries. Next they investigate the effects of specific design features of insolvency regimes in relation to the quality of the countries' overall judicial systems on the use of bankruptcy. The authors find, correcting for overall financial development and macroeconomic shocks, that bankruptcies are higher in Anglo-Saxon countries and in market-oriented financial systems characterized by weaker and multiple banking relationships. They also find that greater judicial efficiency is associated with more use of bankruptcy, but that the combination of stronger creditor rights with greater judicial efficiency leads to less use. The authors find that the presence of a "stay on assets" leads to fewer bankruptcies independent of the efficiency of the judicial system. These findings suggest that there are important incentive effects of insolvency systems encouraging less risky behavior and more out-of-court settlements. 2013-06-27T19:52:45Z 2013-06-27T19:52:45Z 2002-07 http://documents.worldbank.org/curated/en/2002/07/1963446/bankruptcy-around-world-explanations-relative-use http://hdl.handle.net/10986/14259 English en_US Policy Research Working Paper;No.2865 CC BY 3.0 IGO http://creativecommons.org/licenses/by/3.0/igo/ World Bank World Bank, Washington, D.C. Publications & Research :: Policy Research Working Paper Publications & Research |
| repository_type |
Digital Repository |
| institution_category |
Foreign Institution |
| institution |
Digital Repositories |
| building |
World Bank Open Knowledge Repository |
| collection |
World Bank |
| language |
English en_US |
| topic |
ACCOUNTING ASIAN DEVELOPMENT BANK ASSETS BANK LOANS BANKRUPTCY BANKRUPTCY CODE BANKRUPTCY COURTS BANKRUPTCY LAW BANKRUPTCY LAWS BANKRUPTCY PROCEDURES BANKRUPTCY PROCEEDINGS BORROWING CAPITAL MARKETS CIVIL LAW COMMON LAW CORPORATE FINANCE CORRUPTION COUNTRY COMPARISONS CREDITOR CREDITORS DEBT RESTRUCTURING DEBTOR DEBTORS DEFAULTS DISTRIBUTION OF WEALTH DIVIDEND PAYOUT DOMESTIC DEBT ECONOMIC DEVELOPMENT ECONOMIC RESEARCH EMPLOYMENT ENTREPRENEURSHIP EQUALITY EQUITY INVESTMENT EQUITY MARKETS FINANCIAL CRISES FINANCIAL CRISIS FINANCIAL INSTITUTIONS FINANCIAL MARKETS FINANCIAL STRUCTURE FINANCIAL SYSTEMS FIXED COSTS GDP GDP PER CAPITA GOING CONCERN VALUE GROWTH RATE INCENTIVE EFFECTS INHERITANCE INSOLVENCY INTEREST RATES LAW CODES LEGAL FRAMEWORK LEGAL RIGHTS LEGAL SYSTEMS LEGALITY LIQUIDATION MACROECONOMIC CONDITIONS MACROECONOMIC PERFORMANCE MACROECONOMIC SHOCKS POLITICAL ECONOMY PROBABILITY OF DEFAULT PROFITABILITY QUALITY OF LAWS REAL GDP REAL INTEREST RATE REORGANIZATION REPUDIATION RESOURCE ALLOCATION RULE OF LAW SYSTEMIC BANKING CRISES TIME SERIES TRANSACTION COSTS TRANSITION ECONOMIES VALUATION WORKING CAPITAL BANKRUPTCY FINANCIAL SYSTEMS CREDITWORTHINESS FINANCIAL ANALYSIS LEGAL FRAMEWORK CORPORATE GOVERNANCE FINANCIAL CRISES INSOLVENCY JUDICIAL SYSTEMS FINANCIAL DEVELOPMENT MACROECONOMIC SHOCKS MARKET ECONOMY BANKING SYSTEMS |
| spellingShingle |
ACCOUNTING ASIAN DEVELOPMENT BANK ASSETS BANK LOANS BANKRUPTCY BANKRUPTCY CODE BANKRUPTCY COURTS BANKRUPTCY LAW BANKRUPTCY LAWS BANKRUPTCY PROCEDURES BANKRUPTCY PROCEEDINGS BORROWING CAPITAL MARKETS CIVIL LAW COMMON LAW CORPORATE FINANCE CORRUPTION COUNTRY COMPARISONS CREDITOR CREDITORS DEBT RESTRUCTURING DEBTOR DEBTORS DEFAULTS DISTRIBUTION OF WEALTH DIVIDEND PAYOUT DOMESTIC DEBT ECONOMIC DEVELOPMENT ECONOMIC RESEARCH EMPLOYMENT ENTREPRENEURSHIP EQUALITY EQUITY INVESTMENT EQUITY MARKETS FINANCIAL CRISES FINANCIAL CRISIS FINANCIAL INSTITUTIONS FINANCIAL MARKETS FINANCIAL STRUCTURE FINANCIAL SYSTEMS FIXED COSTS GDP GDP PER CAPITA GOING CONCERN VALUE GROWTH RATE INCENTIVE EFFECTS INHERITANCE INSOLVENCY INTEREST RATES LAW CODES LEGAL FRAMEWORK LEGAL RIGHTS LEGAL SYSTEMS LEGALITY LIQUIDATION MACROECONOMIC CONDITIONS MACROECONOMIC PERFORMANCE MACROECONOMIC SHOCKS POLITICAL ECONOMY PROBABILITY OF DEFAULT PROFITABILITY QUALITY OF LAWS REAL GDP REAL INTEREST RATE REORGANIZATION REPUDIATION RESOURCE ALLOCATION RULE OF LAW SYSTEMIC BANKING CRISES TIME SERIES TRANSACTION COSTS TRANSITION ECONOMIES VALUATION WORKING CAPITAL BANKRUPTCY FINANCIAL SYSTEMS CREDITWORTHINESS FINANCIAL ANALYSIS LEGAL FRAMEWORK CORPORATE GOVERNANCE FINANCIAL CRISES INSOLVENCY JUDICIAL SYSTEMS FINANCIAL DEVELOPMENT MACROECONOMIC SHOCKS MARKET ECONOMY BANKING SYSTEMS Claessens, Stijn Klapper, Leora F. Bankruptcy Around the World: Explanations of its Relative Use |
| relation |
Policy Research Working Paper;No.2865 |
| description |
The recent literature on law and finance
has drawn attention to the importance of creditor rights in
influencing the development of financial systems and in
affecting firm corporate governance and financing patterns.
Recent financial crises have also highlighted the importance
of insolvency systems to resolve corporate sector financial
distress. The literature and crises have emphasized the
complex role of creditor rights, affecting not only the
efficiency of ex-post resolution of distressed corporations,
but also influencing ex-ante risk-taking incentives and an
economy's degree of entrepreneurship more generally.
The authors document how often bankruptcy is actually being
used for a panel of 35 countries. Next they investigate the
effects of specific design features of insolvency regimes in
relation to the quality of the countries' overall
judicial systems on the use of bankruptcy. The authors find,
correcting for overall financial development and
macroeconomic shocks, that bankruptcies are higher in
Anglo-Saxon countries and in market-oriented financial
systems characterized by weaker and multiple banking
relationships. They also find that greater judicial
efficiency is associated with more use of bankruptcy, but
that the combination of stronger creditor rights with
greater judicial efficiency leads to less use. The authors
find that the presence of a "stay on assets" leads
to fewer bankruptcies independent of the efficiency of the
judicial system. These findings suggest that there are
important incentive effects of insolvency systems
encouraging less risky behavior and more out-of-court settlements. |
| format |
Publications & Research :: Policy Research Working Paper |
| author |
Claessens, Stijn Klapper, Leora F. |
| author_facet |
Claessens, Stijn Klapper, Leora F. |
| author_sort |
Claessens, Stijn |
| title |
Bankruptcy Around the World: Explanations of its Relative Use |
| title_short |
Bankruptcy Around the World: Explanations of its Relative Use |
| title_full |
Bankruptcy Around the World: Explanations of its Relative Use |
| title_fullStr |
Bankruptcy Around the World: Explanations of its Relative Use |
| title_full_unstemmed |
Bankruptcy Around the World: Explanations of its Relative Use |
| title_sort |
bankruptcy around the world: explanations of its relative use |
| publisher |
World Bank, Washington, D.C. |
| publishDate |
2013 |
| url |
http://documents.worldbank.org/curated/en/2002/07/1963446/bankruptcy-around-world-explanations-relative-use http://hdl.handle.net/10986/14259 |
| _version_ |
1764429896265760768 |