Learning by Doing: Evidence from Bankruptcy Judges

54 Pages Posted: 8 Dec 2017 Last revised: 2 Feb 2020

See all articles by Benjamin Charles Iverson

Benjamin Charles Iverson

Brigham Young University

Joshua Madsen

University of Minnesota - Twin Cities - Carlson School of Management

Wei Wang

Queen's University - Smith School of Business

Qiping Xu

University of Illinois Urbana Champaign

Date Written: January 30, 2020

Abstract

Exploiting the random assignment of corporate bankruptcy filings, we estimate the speed with which judges learn to manage complex corporate restructuring. Despite significant prior experience, new judges rule slower on motions and their cases spend more time in bankruptcy. Bankruptcy judges' learning curve is approximately one year for the average filing, but four years for the most complex filings. Exposure to more corporate cases and a greater diversity of businesses accelerates judges' learning. Complex filings assigned to experienced judges are more likely to reorganize but not more likely to refile for bankruptcy, and their creditors have higher recovery rates.

Keywords: bankruptcy judges, human capital, learning by doing, job-specific skills

JEL Classification: G33, G34, J24

Suggested Citation

Iverson, Benjamin Charles and Madsen, Joshua and Wang, Wei and Xu, Qiping, Learning by Doing: Evidence from Bankruptcy Judges (January 30, 2020). Available at SSRN: https://ssrn.com/abstract=3084318 or http://dx.doi.org/10.2139/ssrn.3084318

Benjamin Charles Iverson

Brigham Young University ( email )

United States

Joshua Madsen

University of Minnesota - Twin Cities - Carlson School of Management ( email )

19th Avenue South
Minneapolis, MN 55455
United States

Wei Wang

Queen's University - Smith School of Business ( email )

Queen's University-Smith School of Business
143 Union Street
Kingston, Ontario K7L 3N6
Canada

Qiping Xu (Contact Author)

University of Illinois Urbana Champaign ( email )

1206 South Sixth Street
Champaign, IL 61820
United States

Here is the Coronavirus
related research on SSRN

Paper statistics

Downloads
302
Abstract Views
2,136
rank
104,061
PlumX Metrics