Publication: Saving Viable Businesses : The Effect of Insolvency Reform
Date
2011-09
ISSN
Published
2011-09
Author(s)
Abstract
The 2008 financial crisis and consequent
rise in corporate insolvencies highlight the clear need for
efficient bankruptcy systems to liquidate unviable firms and
reorganize viable ones and to do so in a way that maximizes
the proceeds for creditors, shareholders, employees, and
other stakeholders. This note summarizes the empirical
literature on the effect of insolvency reforms on economic
and financial activity. Overall, research suggests that
effective reforms increase timely repayments, reduce the
cost of credit, and lower the rate of liquidation among
distressed firms.
Citation
“Klapper, Leora. 2011. Saving Viable Businesses : The Effect of Insolvency Reform. Viewpoint: Public Policy for the Private Sector; Note No. 328. © World Bank, Washington, DC. http://openknowledge.worldbank.org/entities/publication/d6232a12-da84-5825-95fd-415e331b677a License: CC BY 3.0 IGO.”
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