Firms’ performance under different bankruptcy systems: a Europe–USA empirical analysis


  • An earlier draft of this paper has been presented at several conferences, including the Midwest Finance Association Annual Meeting 2010, Las Vegas (USA); The Finance Forum 2008, Barcelona (Spain); and The Scientific Association of Economy and Business Annual Meeting 2008, Leon (Spain) (Best Paper Award Winner). We thank an anonymous referee and the discussants for helpful comments and suggestions.


This study empirically analyses the effect that the bankruptcy law has on firms’ performance based on its financial situation. To do this, we considered the different types of efficiency and their influence on firms’ value. The study was carried out for Germany, Spain, the United States, France and the United Kingdom. We applied System-GMM estimation to dynamic panel data. The main results show that under creditor-oriented systems, there is a decrease in the value of both financially distressed firms and those filing for bankruptcy.