Spanish small businesses rarely file for bankruptcy, and Spanish bankruptcy rates are abnormally small. The historical inadequacy of the Spanish insolvency system has led most enterprises to rely on the de facto alternative mortgage system and to overinvest in fixed tangible assets: a distortion that may trigger significant adverse effects, for instance on the enabling environment of novel entrepreneurship. The reform of the bankruptcy law that took place in Spain some 10 years in order to modernise the insolvency system involved, as a main novelty, the establishment of specialised commercial courts (Juzgados de lo Mercantil). Since the net benefits of specialised judicial functions are in principle ambiguous, we study empirically whether these new bodies had any impact, over and above the economic crisis, on the use of the bankruptcy system. Exploiting the staggered timing of the new courts geography, we estimate an endogenous treatment model with a binary policy variable which allows to measure the effect of the reform on bankruptcy rates. The results support the view that the new bankruptcy law took the right path, but the size of the estimated parameters call for further policy efforts in that direction.

Did specialised courts affect the frequency of business bankruptcy petitions in Spain? / Detotto, Claudio; Serra, Laura; Vannini, Marco. - In: EUROPEAN JOURNAL OF LAW AND ECONOMICS. - ISSN 0929-1261. - 47:1(2018), pp. 125-145. [10.1007/s10657-018-9601-z]

Did specialised courts affect the frequency of business bankruptcy petitions in Spain?

Vannini, Marco
2018-01-01

Abstract

Spanish small businesses rarely file for bankruptcy, and Spanish bankruptcy rates are abnormally small. The historical inadequacy of the Spanish insolvency system has led most enterprises to rely on the de facto alternative mortgage system and to overinvest in fixed tangible assets: a distortion that may trigger significant adverse effects, for instance on the enabling environment of novel entrepreneurship. The reform of the bankruptcy law that took place in Spain some 10 years in order to modernise the insolvency system involved, as a main novelty, the establishment of specialised commercial courts (Juzgados de lo Mercantil). Since the net benefits of specialised judicial functions are in principle ambiguous, we study empirically whether these new bodies had any impact, over and above the economic crisis, on the use of the bankruptcy system. Exploiting the staggered timing of the new courts geography, we estimate an endogenous treatment model with a binary policy variable which allows to measure the effect of the reform on bankruptcy rates. The results support the view that the new bankruptcy law took the right path, but the size of the estimated parameters call for further policy efforts in that direction.
2018
Did specialised courts affect the frequency of business bankruptcy petitions in Spain? / Detotto, Claudio; Serra, Laura; Vannini, Marco. - In: EUROPEAN JOURNAL OF LAW AND ECONOMICS. - ISSN 0929-1261. - 47:1(2018), pp. 125-145. [10.1007/s10657-018-9601-z]
File in questo prodotto:
File Dimensione Formato  
Detotto, Serra, Vannini EJLE, 2018 POST-PRINT per IRIS.pdf

accesso aperto

Tipologia: Documento in Post-print (versione referata ma senza layout editoriale)
Licenza: DRM non definito
Dimensione 1.92 MB
Formato Adobe PDF
1.92 MB Adobe PDF Visualizza/Apri

I documenti in IRIS sono protetti da copyright e tutti i diritti sono riservati, salvo diversa indicazione.

Utilizza questo identificativo per citare o creare un link a questo documento: https://hdl.handle.net/11388/221490
Citazioni
  • ???jsp.display-item.citation.pmc??? ND
  • Scopus 7
  • ???jsp.display-item.citation.isi??? 5
social impact