Going Bankrupt in China / Bo Li, Jacopo Ponticelli.

Format:

Book

Author/Creator:

Li, Bo.

Contributor:

National Bureau of Economic Research.

Ponticelli, Jacopo.

Series:

Working Paper Series (National Bureau of Economic Research) no. w27501.

NBER working paper series no. w27501

Language:

English

Physical Description:

1 online resource: illustrations (black and white);

Place of Publication:

Cambridge, Mass. National Bureau of Economic Research 2020.

Summary:

Using a new case-level dataset we document a set of stylized facts on bankruptcy in China and study how the staggered introduction of specialized courts across Chinese cities affects insolvency resolution and the local economy. For identification, we compare bankruptcy cases handled by specialized versus traditional civil courts within the same city and filed in the same year. We find that specialized courts decrease case duration by 36% relative to traditional civil courts. We provide evidence consistent with court specialization increasing efficiency via selection of better trained judges and higher judicial independence from local politicians. We document that cities introducing specialized courts experience a relative reallocation of employment out of zombie-firms-intensive sectors, as well as faster firm entry and a larger increase in average capital productivity.

Notes:

Print version record

July 2020.