The Comparative Efficiency of Small-Firm Bankruptcies: A Study of the Us and Finnish Bankruptcy Codes

Financial Management, Vol. 27, No. 4, Winter 1998

Posted: 18 Jan 1999

See all articles by S. Abraham Ravid

S. Abraham Ravid

Yeshiva University - Syms School of Business

Stefan Sundgren

Swedish School of Economics and Business Administration

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Abstract

We use a sample of small firms to compare efficiency aspects of the creditor-oriented old Finnish bankruptcy code and the debtor-oriented US code. We find that although the same economic factors affect liquidations in both the US and Finland, Finnish firms are somewhat more likely to be liquidated. We also find that in Finland, the costs of going- concern sales and liquidations tend to go towards the higher end of the range found in US studies, and that payments to creditors in US reorganizations are higher than those under the Finnish code.

JEL Classification: G33

Suggested Citation

Ravid, S. Abraham and Sundgren, Stefan, The Comparative Efficiency of Small-Firm Bankruptcies: A Study of the Us and Finnish Bankruptcy Codes. Financial Management, Vol. 27, No. 4, Winter 1998, Available at SSRN: https://ssrn.com/abstract=144191

S. Abraham Ravid (Contact Author)

Yeshiva University - Syms School of Business ( email )

United States

Stefan Sundgren

Swedish School of Economics and Business Administration ( email )

P.O. Box 287
FI-65100 Vasa
Finland

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