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Bankruptcy and Firm Dynamics [electronic resource]: The Case of the Missing Firms

Author
Rodríguez-Delgado, Jose Daniel
Published
Washington : International Monetary Fund Feb. 2010
Physical Description
35 p.
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Summary
Annotation Financial frictions have been documented as an important determinant of firm dynamics. In this paper I model bankruptcy procedures, liquidation in particular, as an institutional feature that affects both sides of financial transactions. I construct a model of firm dynamics that generate endogenous borrowing limits and I find that a) inefficient bankruptcy procedures can have quantitatively important aggregate effects, but more importantly; b) that such effects would not be directly visible in the firms that industrial censuses and surveys focus on. I conclude that to capture the effects of the legal framework we need to look beyond the existing firms.
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ISBN
9781451962932
1451962932 (Trade Paper)
View MARC record | catkey: 15210297