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Court structure and legal efficiency, the case of French échevinage in bankruptcy courts

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  • Stéphane Esquerré

    (LARGE - Laboratoire de recherche en gestion et économie - UNISTRA - Université de Strasbourg - L'europe en mutation : histoire, droit, économie et identités culturelles - UNISTRA - Université de Strasbourg - CNRS - Centre National de la Recherche Scientifique)

Abstract

This paper investigates how the Court's organisation affect judgments. We use a historical accident to derive this impact. Indeed, though the same bankruptcy laws apply on the whole territory, courts in the eastern part of France (in Alsace-Moselle) consist on a mix of professional and non-professional judges, while other French Courts are only composed of lay judges. Using an original dataset of firms with monthly bankruptcy ratings, we analyse the decision to file for bankruptcy. To do so we restrict our sample to firms inside and outside but close to Alsace-Moselle. We study their survival after their rating has dropped between two months. We find mixed Courts in Alsace-Moselle have lower rates of bankruptcy which should be explained by a lower reorganisation rate. We could think that mixed courts are less efficient ex-ante compared to lay courts. Yet both have overall similar level of liquidation rate. Thus, both systems provide similar ex-post efficiency while behaving differently.

Suggested Citation

  • Stéphane Esquerré, 2019. "Court structure and legal efficiency, the case of French échevinage in bankruptcy courts," Working Papers hal-02305492, HAL.
  • Handle: RePEc:hal:wpaper:hal-02305492
    Note: View the original document on HAL open archive server: https://hal.archives-ouvertes.fr/hal-02305492
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    References listed on IDEAS

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    1. Jordi Blanes i Vidal & Clare Leaver, 2015. "Bias in Open Peer-Review: Evidence from the English Superior Courts," Journal of Law, Economics, and Organization, Oxford University Press, vol. 31(3), pages 431-471.
    2. Lambert-Mogiliansky, Ariane & Sonin, Konstantin & Zhuravskaya, Ekaterina, 2007. "Are Russian commercial courts biased? Evidence from a bankruptcy law transplant," Journal of Comparative Economics, Elsevier, vol. 35(2), pages 254-277, June.
    3. Matthieu Chemin & Etienne Wasmer, 2009. "Using Alsace-Moselle Local Laws to Build a Difference-in-Differences Estimation Strategy of the Employment Effects of the 35-Hour Workweek Regulation in France," Journal of Labor Economics, University of Chicago Press, vol. 27(4), pages 487-524, October.
    4. repec:dau:papers:123456789/1711 is not listed on IDEAS
    5. Shleifer, Andrei, 2012. "The Failure of Judges and the Rise of Regulators," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262016958.
    6. Philippe, Arnaud, 2017. "Do jurors and professional judges differ in their treatment of crime?: Evidence from French reform," TSE Working Papers 17-763, Toulouse School of Economics (TSE).
    7. Régis Blazy & Bertrand Chopard, 2012. "(Un)secured debt and the likelihood of court-supervised reorganization," European Journal of Law and Economics, Springer, vol. 34(1), pages 45-61, August.
    8. Ashenfelter, Orley & Eisenberg, Theodore & Schwab, Stewart J, 1995. "Politics and the Judiciary: The Influence of Judicial Background on Case Outcomes," The Journal of Legal Studies, University of Chicago Press, vol. 24(2), pages 257-281, June.
    9. Blazy, Régis & Chopard, Bertrand & Fimayer, Agnès & Guigou, Jean-Daniel, 2011. "Employment preservation vs. creditors' repayment under bankruptcy law: The French dilemma?," International Review of Law and Economics, Elsevier, vol. 31(2), pages 126-141, June.
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    Cited by:

    1. Anne Épaulard & Chloé Zapha, 2019. "Bankruptcy Costs and the Design of Preventive Restructuring Procedures," Working Papers hal-02383494, HAL.

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