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Bankrtuptcy in Russia: External Management Performance

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  • Zakolyukina Anastasia

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    Abstract

    The project examines the performance of the external management procedure on the data set from the arbitration court of the Udmurt Republic and the unique data set of politically connected firms that went bankrupt 1995–2004 in Russia. We use a narrow definition of political connections: a CEO or a member of an executive board being a member of par-liament or a top executive at the federal, regional, or municipal level. We show that political connections matter for the timing of bankruptcy procedures. Also, political connections do not result in efficiency-enhancing bankruptcies; in line with a politicians-and-firms story, politically connected firms preserve employment rather than increase productivity. Based on the court level data, we find that debt concentration increases likelihood of external management initiation, whereas external management itself decreases the share of total debt repaid. However, there is no evidence of adminis-trative expenses inflation in favor of a particular unsecured creditor under the assumption of a tradeoff between inflation of administrative expenses and main debt repayment.

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    Bibliographic Info

    Paper provided by EERC Research Network, Russia and CIS in its series EERC Working Paper Series with number 06-09e.

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    Date of creation: 18 Dec 2006
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    Handle: RePEc:eer:wpalle:06-09e

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    Postal: EERC Research Network, Russia and CIS, 1, Mazepy Str., suite 202, Kyiv, 01010 Ukraine
    Phone: +38(044)492-8012
    Fax: +1(202)478-1968
    Web page: http://www.eerc.ru

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    Postal: EERC Research Network, Russia and CIS, 1, Mazepy Str., suite 202, Kyiv, 01010 Ukraine
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    Web: https://eerc.ru/paper

    Related research

    Keywords: Russia; bankruptcy; external management; liquidation; political connections;

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