دانلود رایگان مقاله انگلیسی ورشکستگی و مشکل اخراج کردن - الزویر 2018

Abstract

Firms may use layoffs as an ex ante mechanism to avoid filing for bankruptcy. However, the national labor law may impose some restrictions that delay or hamper the firing decision of the employer. This study proposes a different legal pathway for policymakers whose goal is to reduce the use of bankruptcy without acting on the design of the bankruptcy law. Using a sample of 33 countries from 2007 to 2015, we show that the total amount of firing restrictions leads to more bankruptcies. The employer's legal obligation to notify a third party prior the dismissal of one employee tends to increase the number of bankruptcies. It is very likely that the employer's rescue strategy endures an intense ex post monitoring of the employment contracts and/or a strong legal opposition to the layoff decision from such third party. In addition, labor codes that apply priority rules in case of reemployment can increase the use of bankruptcy.

6. Conclusion

National labor law may impose some restrictions that delay or hamper the firing decision of the employer. As opposed to flexible laws, such rigid labor laws can be in contradiction to firms' objectives to use layoffs as an ex ante mechanism to avoid bankruptcy. Labor regulations that delay the layoff decision may incite owners and/or managers to find other rescue strategies. If no other solution cannot hamper the payment default of debts, firms may be forced to file for bankruptcy. After controlling for the economic and legal environment, time effects and country fixed-effects, our study shows that the amount of firing restrictions 2-years prior the bankruptcy triggering leads to more bankruptcies. Rigid laws with a slowdown layoff process are associated with a high level of bankruptcy use. Although employees' interests benefit from such laws, it seems that the failure risk of firms tends to be higher when rescue layoff strategies cannot be so easily implemented by the firms.