Employment Policy and Bankruptcy Law - Does Legal Tradition Matter?

39 Pages Posted: 21 Feb 2006

See all articles by Nuno Garoupa

Nuno Garoupa

George Mason University - Antonin Scalia Law School, Faculty

António José Morgado

Instituto Politécnico de Lisboa - ISCAL

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 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 Garoupa (Contact Author)

George Mason University - Antonin Scalia Law School, Faculty ( email )

3301 Fairfax Drive
Arlington, VA 22201
United States

António José Morgado

Instituto Politécnico de Lisboa - ISCAL ( email )

Avenida Miguel Bombarda 20
Lisbon, 1050-053
Portugal

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