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
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: Suggested Citation