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The impact of bankruptcy regimes on entrepreneurship and innovation. Is there any relationship?

Author

Listed:
  • Błażej Prusak

    (Gdańsk University of Technology)

  • Sylwia Morawska

    (SGH Warsaw School of Economics, Collegium of Business Administration)

  • Michał Łukowski

    (Poznań University of Economics and Business)

  • Przemysław Banasik

    (Gdańsk University of Technology)

Abstract

The literature review indicates that bankruptcy law may play an important role in and be one of the factors influencing the development of entrepreneurship, innovation, and thus economic growth, among other things. In previous studies, the analysis of the impact of bankruptcy law on individual variables has been conducted independently. Our aim was to conduct a holistic analysis, taking several factors into account simultaneously. Therefore, a descriptive model was proposed, based on which the following research hypothesis was formulated: In countries characterised by an effective legal system and at the same time debtor-friendly bankruptcy law, the level of risk acceptance among entrepreneurs is higher, which is reflected in higher levels of entrepreneurship and innovation. Based on the selected variables, a cross-sectional analysis was conducted using linear models estimated on the basis of the least-squares method. Additionally, to strengthen the conclusions drawn, the models were assessed in such a way enabling the analysis of causality as defined by Granger based on the two-step process. The results obtained allowed us to confirm the research hypothesis: in countries characterised by an efficient legal system and at the same time debtor-friendly bankruptcy law, the level of risk acceptance among entrepreneurs is higher, which is reflected in higher levels of entrepreneurship and innovation. The research results are particularly important from the point of view of legislators who are responsible for drafting amendments to bankruptcy law. Including certain debtor-friendly provisions may, in the long run, lead to increased entrepreneurship and innovation, and thus economic development.

Suggested Citation

  • Błażej Prusak & Sylwia Morawska & Michał Łukowski & Przemysław Banasik, 2022. "The impact of bankruptcy regimes on entrepreneurship and innovation. Is there any relationship?," International Entrepreneurship and Management Journal, Springer, vol. 18(1), pages 473-498, March.
    • Handle: RePEc:spr:intemj:v:18:y:2022:i:1:d:10.1007_s11365-021-00773-3
    DOI: 10.1007/s11365-021-00773-3
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    References listed on IDEAS

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    More about this item

    Keywords

    Entrepreneurship; Innovation; Bankruptcy; Law & Economics; Institutional economics;
    All these keywords.

    JEL classification:

    • K22 - Law and Economics - - Regulation and Business Law - - - Business and Securities Law
    • L26 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Entrepreneurship
    • G15 - Financial Economics - - General Financial Markets - - - International Financial Markets
    • G33 - Financial Economics - - Corporate Finance and Governance - - - Bankruptcy; Liquidation

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