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The impact of institutional and macroeconomic conditions on aggregate business bankruptcy

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  • ben Jabeur, Sami
  • Mefteh-Wali, Salma
  • Carmona, Pedro

Abstract

This paper investigates the aggregate business bankruptcy in relation to three macro-level factors: the government effectiveness, entrepreneurship activity and control of corruption for six European countries during the period from 2004 to 2017. We employ fuzzy-set qualitative comparative analysis (fsQCA) and partial least squares regression (PLS). Our findings show that countries with a high level of new firm creation and entrepreneurial activity can lead to a rise in the number of company failures. Furthermore, countries with a low corruption index and high levels of government effectiveness can mitigate insolvency. Our results have several policy implications for the evaluation and modification of the bankruptcy legal process.

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  • ben Jabeur, Sami & Mefteh-Wali, Salma & Carmona, Pedro, 2021. "The impact of institutional and macroeconomic conditions on aggregate business bankruptcy," Structural Change and Economic Dynamics, Elsevier, vol. 59(C), pages 108-119.
    • Handle: RePEc:eee:streco:v:59:y:2021:i:c:p:108-119
    DOI: 10.1016/j.strueco.2021.08.010
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