Publication
Title
Legal reform and aggregate small and micro business bankruptcy rates: evidence from the 1997 Belgian bankruptcy code
Author
Abstract
Many Continental European countries recently reformed their bankruptcy legislations to stimulate reorganization and firm survival. We show that the Belgian 1997 bankruptcy code reform, which implemented several international best practice recommendations, significantly reduced aggregate small and micro business bankruptcy rates. However, using distributed lag models to control for the relationship between bankruptcy rates and macroeconomic variables such as real GDP growth, consumer confidence, inflation, etc., we find that the new codes impact is not the same for all types of companies. Specifically, while the beneficial effect of the reform is largely similar between small firms (i.e. stock corporations) and micro firms (i.e. partnerships), it is only significant in certain industries (manufacturing and trade). Overall, our results indicate that especially the measures taken to limit domino bankruptcy effects are likely to have had a substantial impact. Our findings have several policy implications for the evaluation and modification of the bankruptcy system.
Language
English
Source (journal)
Small business economics: an international journal. - Dordrecht
Publication
Dordrecht : 2008
ISSN
0921-898X
Volume/pages
31:4(2008), p. 409-424
ISI
000260380000006
Full text (Publishers DOI)
UAntwerpen
Faculty/Department
Research group
Publication type
Subject
External links
Web of Science
Record
Identification
Creation 29.04.2009
Last edited 20.04.2017