Do Court Delays Distort Capital Formation?

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	Do Court Delays Distort Capital Formation?
	Pantelis Koutroumpis and Farshad R. Ravasan
	2020-05-20
出版年	2020
国家	英国
领域	地球科学 ; 资源环境
英文摘要	Weak enforcement of financial contracts often distorts the incentive to invest and delays efforts to catch up with the technology frontier. We study how longer bankruptcy trials affect the cost, structure and allocation of corporate capital across different regions in Italy. We take advantage of an exogenous change in local court efficiency caused by the reorganization of judicial districts under the legislative reform of 2012. Using an instrumental variable strategy, we find that the change in length of bankruptcy proceedings had a strong impact on firm-level outcomes. Our estimates show that the interquantile reduction in the length of bankruptcy trials lowers the marginal cost of capital by 11.5% and increases the firm’s capital stock and capital intensity of production by 9.7% to 11.5%. Significantly, our results show that poor enforcement of financial contract lead firms to under-allocate capital in their intangible assets. Moreover the effects are stronger in sectors that depend more on external finance and firms with high leverage.
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来源平台	Oxford Martin School, University of Oxford
文献类型	科技报告
条目标识符	http://119.78.100.173/C666/handle/2XK7JSWQ/273457
专题	地球科学资源环境科学
推荐引用方式 GB/T 7714	Pantelis Koutroumpis and Farshad R. Ravasan. Do Court Delays Distort Capital Formation?,2020.