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Bankruptcies With Soft Budget Constraint

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  • KAREL JANDA

Abstract

The optimal design of credit contracts and bankruptcy procedures is an important policy question in both developed and developing economies. In this paper we deal with several theoretical considerations related to these important policy problems. The main concern of this paper is with the impact of the relaxation of bankruptcy procedures providing for the possibility of debt renegotiation instead of strictly imposing bankruptcy whenever the debtor falls into default on his or her debt. This paper contributes to the discussion on optimal bankruptcy procedures in the context of soft and hard budget constraint literature. Copyright � 2009 The Author. Journal compilation � 2009 Blackwell Publishing Ltd and The University of Manchester.

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Bibliographic Info

Article provided by University of Manchester in its journal The Manchester School.

Volume (Year): 77 (2009)
Issue (Month): 4 (07)
Pages: 430-460

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Handle: RePEc:bla:manchs:v:77:y:2009:i:4:p:430-460

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References

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  24. Hsiao-Chi Chen & Shi-Miin Liu, 2008. "Incentive Contracts Under Imperfect Auditing," Manchester School, University of Manchester, vol. 76(2), pages 131-159, 03.
  25. Ondøej Knot & Ondøej Vychodil, 2006. "Czech Bankruptcy Procedures: Ex-post Efficiency View," Working Papers IES 2006/03, Charles University Prague, Faculty of Social Sciences, Institute of Economic Studies, revised Jan 2006.
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  27. Hainz, Christa, 2007. "The Effect of Bank Competition on the Bank's Incentive to Collateralize," Discussion Papers in Economics 2007, University of Munich, Department of Economics.
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Citations

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Cited by:
  1. Karel Janda & Eva Michalíková & Jiøí Skuhrovec, 2012. "Credit Support for Export: Econometric Evidence from the Czech Republic," Working Papers IES 2012/12, Charles University Prague, Faculty of Social Sciences, Institute of Economic Studies, revised May 2012.
  2. Karel Janda & Eva Michalíková & Věra Potácelová, 2010. "Gravity and Fiscal Models of Government Support of Export Credit in the Czech Republic," Politická ekonomie, University of Economics, Prague, vol. 2010(3), pages 305-325.

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