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SSRN
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Corporate Bankruptcy and Creditor Incentives

SSRN Electronic Journal
2016
  • 16
    Citations
  • 6,326
    Usage
  • 11
    Captures
  • 0
    Mentions
  • 0
    Social Media
Metric Options:   Counts1 Year3 Year

Metrics Details

  • Citations
    16
    • Citation Indexes
      16
  • Usage
    6,326
    • Abstract Views
      5,509
    • Downloads
      817
  • Captures
    11
    • Readers
      8
    • Exports-Saves
      3
      • SSRN
        3
  • Ratings
    • Download Rank
      60,811

Article Description

Pursuing delinquent borrowers requires considerable effort, and creditors may lack the incentive to exert this costly effort in uncompetitive banking sectors. To examine this, we use a uniquely large dataset of public and private corporate bankruptcy filings spanning a banking-sector reform that deregulated bank entry across different regions of India. We find that increased banking competition is associated with more firms seeking a stay on assets, a decline in bankruptcy duration, and a shift towards workouts rather than liquidations. The results are consistent with creditors exerting greater effort to pursue delinquent firms and resolve bankruptcies more quickly when competition increases.

Bibliographic Details

Todd A. Gormley; Nandini Gupta; Anand Jha

Elsevier BV

Bankruptcy; creditor rights; bank competition; managerial incentives

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