Work

Bankruptcy and Voluntary Liquidation : Evidence for New Firms in East and West Germany after Unification

Year: 2003

Type: preprint

Abstract: Exploiting the unique economic situation after German unification, I investigate how exit decisions deviate between new firms in a transition and a comparatively stable market environment. Two competing exit mechanisms are considered: entrepreneurial self-selection via voluntary liquidation and external selection based on insolvency regulation. Distinguishing between the competing exit modes proves to be crucial in semi-parametric proportional hazard-rate estimations. Comparing East and West Germany, I find distinct education and size effects and a higher share of bankruptcy-related liquidations in East Germany. These results are argued to reflect different industry structures, capital and labor market conditions in both parts of Germany.

Source: RePEc: Research Papers in Economics

Author: Susanne Prantl

Language: English

Topic: Corporate Insolvency and Governance

Subfield: Law

Field: Social Sciences

Domain: Social Sciences

SDG: Decent work and economic growth

Open Access status: green

Funders: National Science Foundation, Deutsche Bundesbank

OpenAlex ID: W1727949928

Cites: 76

Cited by: 25

Related to: 10