Why do spanish firms rarely use the bankruptcy system? The role of the mortgage institution
AbstractTaking advantage of a rich database of more than 1 million companies in Spain, France and the U.K., we propose and test a hypothesis to explain why Spain has one of the world’s lowest business bankruptcy rates, even during the current economic crisis and after controlling for market exit rates. This hypothesis is based on two premises, the low efficiency of the Spanish bankruptcy system relative to that of an alternative insolvency institution, the mortgage system, and the unattractiveness of the personal bankruptcy law
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Bibliographic InfoPaper provided by Banco de Espa�a in its series Banco de Espa�a Working Papers with number 1234.
Length: 54 pages
Date of creation: Sep 2012
Date of revision:
Bankruptcy; mortgage; insolvency;
Find related papers by JEL classification:
- G33 - Financial Economics - - Corporate Finance and Governance - - - Bankruptcy; Liquidation
- G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages
- K0 - Law and Economics - - General
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