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Does commercial court organisation affect firms’ bankruptcy rate? evidence from the french judicial reform

Author

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  • Giuseppe Arcuri

    (University Paris 1 Panthéon-Sorbonne, PRISM, EconomiX)

  • Nadine Levratto

    (University Paris Nanterre)

  • Marianna Succurro

    (University of Calabria)

Abstract

The aim of this paper is to evaluate the impact of the 2010 French judicial reform of commercial courts on firms’ financial bankruptcy rate at the municipality level. The research is based on a panel dataset containing microdata between 2004 and 2015, taken from Banque de France and the French National Institute of Statistics. We use a difference-in-differences analysis comparing the economic behaviour of firms in municipalities where the reform was implemented with those where it was not before and after the reform. The econometric findings indicate that municipalities that changed commercial courts because of the reform experienced a decrease in firms’ bankruptcy rate but that changing the judicial map did not impact the arbitrage between liquidation and reorganisation of the insolvent companies. Some policy implications conclude the work.

Suggested Citation

  • Giuseppe Arcuri & Nadine Levratto & Marianna Succurro, 2023. "Does commercial court organisation affect firms’ bankruptcy rate? evidence from the french judicial reform," European Journal of Law and Economics, Springer, vol. 55(3), pages 573-601, June.
    • Handle: RePEc:kap:ejlwec:v:55:y:2023:i:3:d:10.1007_s10657-023-09765-w
    DOI: 10.1007/s10657-023-09765-w
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    More about this item

    Keywords

    Bankruptcy; Judiciary; Reform; Evaluation; Judicial geography;
    All these keywords.

    JEL classification:

    • D22 - Microeconomics - - Production and Organizations - - - Firm Behavior: Empirical Analysis
    • H11 - Public Economics - - Structure and Scope of Government - - - Structure and Scope of Government
    • H41 - Public Economics - - Publicly Provided Goods - - - Public Goods
    • K40 - Law and Economics - - Legal Procedure, the Legal System, and Illegal Behavior - - - General
    • L25 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Firm Performance

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