Are there alternatives to bankruptcy? a study of small business distress in Spain
AbstractSmall businesses, the majority of Spanish fi rms, rarely fi le for formal bankruptcy, and this has been the case even during the current economic crisis. This suggests that bankruptcy law has a limited role to play in the distress of small fi rms. We propose an explanation based on two premises: (i) bankruptcy procedures are more costly and drawn out than the main alternative procedure, the mortgage foreclosure; (ii) personal bankruptcy law is unattractive to the individual debtor. Empirical analyses on a large micro data sample of Spanish, French and UK fi rms corroborate our hypothesis. It is important to note that these results are based on data that do not yet capture the impact of recent reforms of the Spanish insolvency framework.
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Bibliographic InfoPaper provided by Banco de Espa�a in its series Banco de Espa�a Working Papers with number 1315.
Length: 55 pages
Date of creation: Oct 2013
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
This paper has been announced in the following NEP Reports:
- NEP-ALL-2013-11-09 (All new papers)
- NEP-CFN-2013-11-09 (Corporate Finance)
- NEP-CSE-2013-11-09 (Economics of Strategic Management)
- NEP-ENT-2013-11-09 (Entrepreneurship)
- NEP-EUR-2013-11-09 (Microeconomic European Issues)
- NEP-LAW-2013-11-09 (Law & Economics)
- NEP-SBM-2013-11-09 (Small Business Management)
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
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