Does Sweden Have Too Many or Too Few Bankruptcies Compared to EU Countries, Norway and the USA?
The main purpose with this paper is to compare the frequency of liquidation bankruptcies in Sweden with the frequency of bankruptcies in countries (Germany, U.S., Finland, Norway, U.K. and Denmark) that have a similar economic structure and there by are we able to investigate the legal influence on bankruptcies and costs associated with bankruptcies. When one judges the frequency of bankruptcy in different countries, the main issue is to decide which frequency of bankruptcy is the optimal one (the efficient one). A country is classified as having “too many” bankruptcies when firms that have a positive net present value (in financial distress but not in economic distress) are closed or if many of the bankruptcies are due economically related crimes. A country is classified as having “too few” bankruptcies when firms that are in both in financial and economic distress continues to operate. Relating bankruptcies to number of employees in the respective country makes it possible to compare frequency of bankruptcies between countries. We compare frequency of bankruptcy between countries for the period 1985 to 1996. Sweden, Norway and Finland have on average a significant higher frequency of bankruptcies than the other countries. In Germany, Finland, Great Britain and Sweden is the use of a reorganisation procedure not a real option to the liquidation procedure, in contrast to U.S. The construction industry and the industry wholesale and retail, repairs, Hotels and restaurants are the industries in every country that either has the highest frequency of bankruptcy or belongs to the industries with the highest frequency of bankruptcy. In Sweden there are four years that deviate in the period of investigation (both in total number of bankruptcies but also with respect to the individual industry bankruptcies) due to an extremely high frequency of bankruptcies (1991 to 1994) and this is the case also for the other countries (at least for the total number of bankruptcies) except for Germany and U.S. Norway is the country with the highest proportion of bankruptcy firms with no employees in relation to total number of bankruptcies. There is no indication that shell-companies are the driving force behind the frequency of bankruptcies in Sweden during the time period investigated. In Sweden, for the period 1991 to 1994, there is an indication that companies ended up earlier than normally in liquidation bankruptcy and also that these companies are in better financial condition than normally. For Sweden, it seems as though the banks do not explicitly file for bankruptcy.
To our knowledge, this item is not available for
download. To find whether it is available, there are three
1. Check below under "Related research" whether another version of this item is available online.
2. Check on the provider's web page whether it is in fact available.
3. Perform a search for a similarly titled item that would be available.
|Date of creation:||18 Nov 2004|
|Date of revision:|
|Contact details of provider:|| Postal: The Ratio Institute, P.O. Box 5095, SE-102 42 Stockholm, Sweden|
Phone: 08-441 59 00
Fax: 08-441 59 29
Web page: http://www.ratio.se/
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.:
- La Porta, Rafael & Lopez-de-Silanes, Florencio & Shleifer, Andrei & Vishny, Robert W., 1998.
"Law and Finance,"
3451310, Harvard University Department of Economics.
- Rafael LaPorta & Florencio Lopez de-Silanes & Andrei Shleifer & Robert W. Vishny, 1996. "Law and Finance," Harvard Institute of Economic Research Working Papers 1768, Harvard - Institute of Economic Research.
- Rafael LaPorta & Florencio Lopez-de-Silanes & Andrei Shleifer & Robert W. Vishny, . "Law and Finance," Working Paper 19451, Harvard University OpenScholar.
- Rafael La Porta & Florencio Lopez-de-Silane & Andrei Shleifer & Robert W. Vishny, 1996. "Law and Finance," NBER Working Papers 5661, National Bureau of Economic Research, Inc.
- Clas Wihlborg & Shubhashis Gangopadhyay, 2001. "Infrastructure Requirements in the Area of Bankruptcy Law," Center for Financial Institutions Working Papers 01-09, Wharton School Center for Financial Institutions, University of Pennsylvania.
- Thorburn, Karin S., 2000. "Bankruptcy auctions: costs, debt recovery, and firm survival," Journal of Financial Economics, Elsevier, vol. 58(3), pages 337-368, December.
When requesting a correction, please mention this item's handle: RePEc:hhs:ratioi:0056. 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: (Martin Korpi)
If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.
If references are entirely missing, you can add them using this form.
If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.
If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.
Please note that corrections may take a couple of weeks to filter through the various RePEc services.