Bankruptcy Technology, Finance, and Entrepreneurship

August 10, 2017

Preview Citation

Format: Chicago

Nelson Sobrinho. Bankruptcy Technology, Finance, and Entrepreneurship, (USA: International Monetary Fund, 2017) accessed November 5, 2024

Disclaimer: IMF Working Papers describe research in progress by the author(s) and are published to elicit comments and to encourage debate. The views expressed in IMF Working Papers are those of the author(s) and do not necessarily represent the views of the IMF, its Executive Board, or IMF management.

Summary

Using an overlapping-generations growth model featuring financial intermediation, I find that inefficiencies in technology to deal with private debt distress (bankruptcy technology), and obstacles to entrepreneurship (high costs of doing business) have significant negative effects on the income per capita and welfare of developing countries. These inefficiencies may also interact in perverse ways, futher amplifying the negagtive effects in the long run. The results provide strong rationale for structural reforms that simultaneously speed up the resolution of private sector insolvency, improve creditor protection, and eliminate obstacles to entrepreneurship.

Subject: Consumption, Credit, Loans, Self-employment, Technology

Keywords: Cost of capital, Rate of return, WP

Publication Details

Pages:

41
Volume:

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DOI:

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Issue:

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Series:

Working Paper No. 2017/188
Stock No:

WPIEA2017188
ISBN:

9781484314210
ISSN:

1018-5941

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