دانلود رایگان مقاله انگلیسی اصلاحات ورشکستگی در میان رکود بزرگ: تجربه اسپانیایی - الزویر 2018

Abstract

We make use of a unique data set of corporate insolvencies in Spain to assess the effectiveness of the four reforms to the Spanish bankruptcy code implemented during the Great Recession (2008-2013). One of the reforms decreased the average duration of insolvency procedures by increasing the appeal of private workouts as an alternative to formal bankruptcy. Two of the reforms increased the percentage of reorganisations by increasing the quality of insolvency administrators and reducing the costs of financial distress. The impact was larger in firms with lower liquidation values and higher going concern values, suggesting an increase in ex-post efficiency. By contrast, two of the reforms did not achieve their goals and failed to have any robust impact on those dimensions. Our research illustrates the important role that insolvency administrators may play in the design of an efficient bankruptcy system, as well as the need for a legal framework that supports out-of-court workouts as an alternative to formal bankruptcies. More generally, our results highlight the importance of evaluating bankruptcy reforms before assessing their impact on other dimensions such as credit, firm financing and investment.

7. Conclusions

In this paper we study the effects of four reforms to the bankruptcy code in Spain during the Great Recession (2008-2013) that aimed to enhance the efficiency of insolvency procedures. Our results suggest that two of the reforms may have a sizeable impact on the probability of reorganisation and on the average length of bankruptcy procedures, while two of them had no robust impact on these dimensions.

First, the reform of March 2014, by improving the legal framework of court-approved refinancing agreements –private workouts that are verified by a judge- may lead to a significant decrease in the duration of bankruptcy procedures. While the number of firms that reach a refinancing agreement with their creditors is quite low, these companies are much larger than most of the firms that file for formal bankruptcy, suggesting that, by increasing the appeal of refinancing agreements as an alternative to formal bankruptcy, the reform may free resources of the bankruptcy courts, reducing their congestion and decreasing the duration procedures.

Second, the reform of March 2014, by decreasing the average length of bankruptcy procedures, may reduce the costs of financial distress and contributed to preserve firms’ going concern value, therefore increasing the probability of reorganisations. Third, the 2012 reform, by increasing the average quality of insolvency administrators, may lead to a significant increase in the probability of reaching a reorganisation agreement. This result is consistent with the theoretical analysis by Ayotte and Yun (2007), who show that the optimal bankruptcy law becomes more debtor-friendly as judicial ability –i.e., the capacity of judges and insolvency trustees to discern between viable and non-viable firms- rises, which leads to a higher percentage of efficient reorganisations.