On Direct Bankruptcy Costs and the Firm's Bankruptcy Decision

12 Pages Posted: 12 Jan 2001

Date Written: January 2001

Abstract

Using firm-level information on 622 commercial bankruptcies filed under Canadian law (324 liquidating firms and 298 reorganizing firms) and controlling for a variety of firm-specific factors, we find there is no difference in direct bankruptcy costs between liquidation and reorganization. We argue that if bankruptcy costs do have an impact on a firm's bankruptcy decision, it can only be through differences in indirect bankruptcy costs.

Keywords: Bankruptcy costs, liquidation, reorganization

JEL Classification: G33, G38

Suggested Citation

Fisher, Timothy and Martel, Jocelyn, On Direct Bankruptcy Costs and the Firm's Bankruptcy Decision (January 2001). Available at SSRN: https://ssrn.com/abstract=256128 or http://dx.doi.org/10.2139/ssrn.256128

Timothy Fisher

Wilfrid Laurier University ( email )

Economics
Waterloo, Ontario N2L 3C5
Canada
519-884-0710 (2671) (Phone)
519-888-1015 (Fax)

Jocelyn Martel (Contact Author)

ESSEC Business School ( email )

Avenue Bernard Hirsch B.P. 50105
Cergy-Pontoise, 95021
France
33 1 34 43 33 21 (Phone)

Do you have a job opening that you would like to promote on SSRN?

Paper statistics

Downloads
530
Abstract Views
2,413
rank
66,497
PlumX Metrics