Bankruptcy law and credit market: a general-equilibrium approach
This study has as its main objective to analyze the best bankruptcy procedure considering the conflict of interests between managers, secured creditors and trade creditors. Such trade-off is strictly connected with industry and countries characteristics, which is also relevant to the design of the bankruptcy law. Simulating a general-equilibrium model with incomplete marktes and bankruptcy, we show that for liquidation procedure that does not depreciates the failed assets too much, bankruptcy-liquidation produces better economic results for sectors intensive in physical capital. As the depreciation in liquidation increases and/or the industry sectors are less intensive in physical capital, the availability of reorganization produces better economic results. Using data of 44 countries, our results points that approximately 60% of the countries in the sample apply a procedure aligned with our suggestions.
|Date of creation:||Mar 2013|
|Publication status:||Published in Fucape Working Papers, Março 2013|
|Contact details of provider:|| Postal: Fucape Business School Brazilian Business Review Av. Fernando Ferrari, 1358, Boa Vista CEP 29075-505 Vitória-ES|
Phone: +55 27 4009-4408
Fax: +55 27 4009-4422
Web page: http://www.fucape.br
More information through EDIRC
References listed on IDEAS
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.:
- Maria Brouwer, 2006. "Reorganization in US and European Bankruptcy law," European Journal of Law and Economics, Springer, vol. 22(1), pages 5-20, July.
- Povel, Paul, 1999.
"Optimal "Soft" or "Tough" Bankruptcy Procedures,"
Journal of Law, Economics and Organization,
Oxford University Press, vol. 15(3), pages 659-684, October.
- Povel, Paul, 1999. "Optimal "Soft" or "Tough" Bankruptcy Procedures," Papers 98-31, Sonderforschungsbreich 504.
- Aloisio Araujo & Bruno Funchal, 2005. "Bankruptcy Law in Latin America: Past and Future," ECONOMIA JOURNAL OF THE LATIN AMERICAN AND CARIBBEAN ECONOMIC ASSOCIATION, ECONOMIA JOURNAL OF THE LATIN AMERICAN AND CARIBBEAN ECONOMIC ASSOCIATION, vol. 0(Fall 2005), pages 149-216, August. Full references (including those not matched with items on IDEAS)
When requesting a correction, please mention this item's handle: RePEc:bbz:fcpwps:39. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Adriana Gasparino)
If references are entirely missing, you can add them using this form.