Employment Policy and Bankruptcy Law - Does Legal Tradition Matter?

39 Pages Posted: 21 Feb 2006  

Nuno M. Garoupa

Texas A&M University School of Law; Catholic University of Portugal (UCP) - Católica Global School of Law

António José Morgado

Universidade Nova de Lisboa - School of Economics

Date Written: February 2006

Abstract

In this paper we analyze the relationship between strictness of employment protection and efficiency of bankruptcy law. We argue that country's legal tradition provides the appropriate institutional proxy to explain the nature of such relationship. We find that for civil law countries where bankruptcy procedures are more inefficient a stricter employment protection policy is enforced. For common law countries no relationship between employment protection and bankruptcy law is obtained. These results support the thesis that inefficiencies in bankruptcy law help employment protection policies for interventionist governments. They are also consistent with normative theories of bankruptcy for common law countries.

Keywords: bankruptcy law, employment protection, legal origin

JEL Classification: K0

Suggested Citation

Garoupa, Nuno M. and Morgado, António José, Employment Policy and Bankruptcy Law - Does Legal Tradition Matter? (February 2006). Available at SSRN: https://ssrn.com/abstract=884163 or http://dx.doi.org/10.2139/ssrn.884163

Nuno M. Garoupa (Contact Author)

Texas A&M University School of Law ( email )

1515 Commerce St.
Fort Worth, TX 76102
United States

Catholic University of Portugal (UCP) - Católica Global School of Law ( email )

Lisboa
Portugal

António José Morgado

Universidade Nova de Lisboa - School of Economics ( email )

Campus de Campolide
Lisboa, 1099-032
Portugal

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