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Does Merging Small Bankruptcy Courts Increase Their Efficiency?

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  • Anne Epaulard

    (OFCE - Observatoire français des conjonctures économiques (Sciences Po) - Sciences Po - Sciences Po, LEDa - Laboratoire d'Economie de Dauphine - IRD - Institut de Recherche pour le Développement - Université Paris Dauphine-PSL - PSL - Université Paris Sciences et Lettres - CNRS - Centre National de la Recherche Scientifique)

  • Chloé Zapha

    (LEDa - Laboratoire d'Economie de Dauphine - IRD - Institut de Recherche pour le Développement - Université Paris Dauphine-PSL - PSL - Université Paris Sciences et Lettres - CNRS - Centre National de la Recherche Scientifique)

Abstract

We estimate the impact of a 2009 reform that merged small bankruptcy courts on the qualityof their rulings. A conceptual framework enables us to link difference-in-difference estimatesto the impact of the reform on Type 1 errors (restructuring a non-viable firm) and Type 2errors (liquidating a viable firm). We apply this framework to an (almost) exhaustive sampleof 600,000 bankruptcy cases in France that started between 2000 and 2019. The reformunambiguously reduces Type 1 errors while having no impact on Type 2 errors. Post-mergercourt behavior is determined more by that of the absorbing court than by that of theabsorbed one.

Suggested Citation

  • Anne Epaulard & Chloé Zapha, 2026. "Does Merging Small Bankruptcy Courts Increase Their Efficiency?," Sciences Po Economics Publications (main) hal-05492507, HAL.
    • Handle: RePEc:hal:spmain:hal-05492507
    Note: View the original document on HAL open archive server: https://hal.science/hal-05492507v1
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