Serrano-Velarde, Nicolas (2012) The Causal Effect of Bankruptcy Law on the Cost of Finance. In: Invited seminars at: Bocconi; ENSAE; Paris School of Economics; Federal Reserve Board, Washington DC; Universities of Toronto, Amsterdam, Pompeu Fabra; and VU Amsterdam, February 2012.Full text not available from this repository.
We exploit the staggered nature of the Italian bankruptcy law reform of 2005-2006 to disentangle the distinct causal impact of both reorganization and liquidation procedures in bankruptcy on firms' cost of loan financing. Using a unique loan-level dataset covering the universe of firm funding contracts we present two major findings: first, that the introduction of a reorganization procedure increased the interest rates on loan financing; second, that the reform that accelerated the liquidation procedure not only decreased firms' cost of finance but also relaxed credit constraints.
|Item Type:||Conference or Workshop Item (Paper)|
|Keywords:||Default, Renegotiation, Bankruptcy Code|
|Centre:||Oxford University Centre for Business Taxation|
|Date Deposited:||29 Aug 2012 15:50|
|Last Modified:||23 Oct 2015 14:07|
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