Commentary: ‘Bankruptcy Laws and Entrepreneur Friendliness’ and ‘How Do Bankruptcy Laws Affect Entrepreneurship Development Around the World?’

8 Pages Posted: 12 Jul 2010 Last revised: 14 Jul 2010

Douglas J. Cumming

York University - Schulich School of Business

Date Written: July 12, 2010

Abstract

Two recent papers examine the impact of corporate bankruptcy laws on new business start ups in 29 countries over 1990-2008 (Peng et al., 2010; Lee et al., 2010). In this commentary, I briefly point out two significant issues which future researchers might want to consider along this line of research. First, several countries in the data examined had changed their personal and corporate bankruptcy laws over the years studied. It is statistically inappropriate and inaccurate to treat bankruptcy laws as time invariant, as in Peng et al. (2010) and Lee et al. (2010), particularly in view of the dramatic changes in bankruptcy law over time in so many countries. Second, Peng et al. (2010) and Lee et al. (2010) have a misplaced focus on corporate bankruptcy law while ignoring personal bankruptcy law. This focus is at odds with theory and prior work on topic which relates entrepreneurship to personal bankruptcy law.

Suggested Citation

Cumming, Douglas J., Commentary: ‘Bankruptcy Laws and Entrepreneur Friendliness’ and ‘How Do Bankruptcy Laws Affect Entrepreneurship Development Around the World?’ (July 12, 2010). Available at SSRN: https://ssrn.com/abstract=1639266 or http://dx.doi.org/10.2139/ssrn.1639266

Douglas J. Cumming (Contact Author)

York University - Schulich School of Business ( email )

4700 Keele Street
Toronto, Ontario M3J 1P3
Canada

HOME PAGE: http://booksite.elsevier.com/9780124095373/

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