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

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
Table Of 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
Literary Form
non fiction
Description based upon print version of record
Physical Description
1 online resource (50 p.)
Specific Material Designation
Form Of Item

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