Bankruptcy and Firm Dynamics : The Case of the Missing Firms / Jose Daniel Rodríguez-Delgado.

Format:

Book

Government document

Author/Creator:

Rodríguez-Delgado, Jose Daniel.

Contributor:

IMF Institute.

International Monetary Fund.

Series:

IMF Working Papers; Working Paper ; No. 2010/041

IMF Working Papers

Language:

English

Subjects (All):

Business failures--Econometric models.

Business failures.

Bankruptcy.

Physical Description:

1 online resource (50 p.)

Place of Publication:

Washington, D.C. : International Monetary Fund, 2010.

Language Note:

English

Summary:

Financial frictions have been documented as an important determinant of firm dynamics. In this paper I model bankruptcy procedures, liquidation in particular, as an institutional feature that affects both sides of financial transactions. I construct a model of firm dynamics that generate endogenous borrowing limits and I find that a) inefficient bankruptcy procedures can have quantitatively important aggregate effects, but more importantly; b) that such effects would not be directly visible in the firms that industrial censuses and surveys focus on. I conclude that to capture the effects of the legal framework we need to look beyond the existing firms.

Contents:

Cover Page; Title Page; Copyright Page; Contents; I. Introduction; II. Related Literature; III. Model Economy; A. Legal Framework; B. Firm's Problem; 1. Existing Project; 2. New Projects; C. Financial Contracts; D. Equilibrium; IV. Simulations; A. Calibration; 1. Bankruptcy Efficiency; 1. Bankruptcy Efficiency and Financial Constraints; 2. Entry and Exit Statistics; 2. Parameter Values; 3. Calibration; 4. Comparative Statics; B. Benchmark Model; 1. Firm's Decision to Liquidate; 1. Liquidation Decision, Average Productivity; 2. Liquidation Decision, High productivity Productivity

2. Bond Price Schedule3. Bond Prices for Large and Small Firms; 4. Effective Financing for Large and Small Firms; 3. Firm Dynamics; 5. Firm Dynamics Benchmark and First Best; C. Comparative Statics; 1. Bond Price Schedules; 6. Effective Financing and Bankruptcy Efficiency; 2. Firm Dynamics; 7. Firm Dynamics and Bankruptcy Efficiency; 3. Aggregate Statistics; 8. Entrants Productivity Distribution; 9. Firm Size Distribution and Bankruptcy Efficiency; 5. Bankruptcy Efficiency and Financial Frictions; V. Concluding Remarks; Appendix Table A.1 Bankruptcy Efficiency for OECD Members; References

Footnotes

Notes:

"February 2010."

Includes bibliographical references.

Description based on print version record.

ISBN:

9786613878595

9781462348688

1462348688

9781452727851

1452727856

9781283566148

1283566141

9781451918861

1451918860