How does legal design affect the initiation of a firm's bankruptcy?

Stef, Nicolae

doi:10.1016/j.econmod.2022.105918

Cited by 4 publications

(4 citation statements)

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“…With the escalation of reforms and systematization of insolvency regimes taking place around the world in recent decades, the issue of business failure has taken on an international dimension (Stef, 2022). Circumstances such as those brought about by the latest financial crises and the COVID-19 pandemic have also fuelled the discourse on the prediction of success in reorganization processes (Greenwood et al ., 2020); a topic which has attracted less research, despite the fact that governments propose corporate reorganization procedures as a credit protection strategy and as an assistance mechanism for the recovery of still viable companies.…”

Section: Discussionmentioning

confidence: 99%

Duty calls: prediction of failure in reorganization processes

Abínzano

Bonilla

Muga

2023

JRF

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PurposeUsing data from business reorganization processes under Act 1116 of 2006 in Colombia during the period 2008 to 2018, a model for predicting the success of these processes is proposed. The paper aims to validate the model in two different periods. The first one, in 2019, characterized by stability, and the second one, in 2020, characterized by the uncertainty generated by the COVID-19 pandemic.Design/methodology/approachA set of five financial variables comprising indebtedness, profitability and solvency proxies, firm age, macroeconomic conditions, and industry and regional dummies are used as independent variables in a logit model to predict the failure of reorganization processes. In addition, an out-of-sample analysis is carried out for the 2019 and 2020 periods.FindingsThe results show a high predictive power of the estimated model. Even the results of the out-of-sample analysis are satisfactory during the unstable pandemic period. However, industry and regional effects add no predictive power for 2020, probably due to subsidies for economic activity and the relaxation of insolvency legislation in Colombia during that year.Originality/valueIn a context of global reform in insolvency laws, the consistent predictive ability shown by the model, even during periods of uncertainty, can guide regulatory changes to ensure the survival of companies entering into reorganization processes, and reduce the observed high failure rate.

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Section: Discussionmentioning

confidence: 99%

Duty calls: prediction of failure in reorganization processes

Abínzano

Bonilla

Muga

2023

JRF

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“…This foundation more or less affects the purpose of establishing a savings and loan cooperative which Subagyo (2014) formulated to improve the welfare of cooperative members (Subagyo, 2014). Furthermore, Subagyo (2014) then formulated how the savings and loan cooperative work systematic, namely using away at the end of the working period, the achievement of these goals must be displayed in the form of a member's 􀅫inancial promotion report; therefore, the achievement goals must be translated into a quantitative form that can be measured in units of money (Stef, 2022). 1.…”

Section: Savings and Loan Cooperatives In Indonesiamentioning

confidence: 99%

“…The economic doctrine that was tried to be applied in the Indonesian economic system was 􀅫irst coined by Mohammad Hatta as the "Pancasila Economic Democracy System." This system is within the scope of people's economic empowerment that upholds the principles of kinship and cooperation (Stef, 2022). Every economic actor in Indonesia must see themselves as integrated with fellow business actors trying to improve the country's economy (Feith, 2006).…”

Section: Introductionmentioning

confidence: 99%

The legal status of fiduciary guarantee belongs to members of save and loan cooperatives due to bankruptcy

Haykal¹,

Permanasari²,

Rabbani³

2022

J. adv. humanit. soc. sci.

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Small and Medium Enterprises and young entrepreneurial business ventures seek capital support from 􀅫inancial institutions for their growth and survival. Especially in post-covid-19 times, it becomes vital for the revival of affected business areas. Thus current research aims to shed light on the scarcely researched phenomenon to contribute to the literature. A cooperative has such a serious nature in the Indonesian national economic system. Cooperatives in Law No. 25 of 1992 are said to be the "principal factor" of the nation's economy. The understanding of the backbone is essentially contained in Article 33 of the Constitution of the Republic of Indonesia year 1945 as the state constitution. In advancing the national economy, cooperatives form business units that focus on certain 􀅫ields, one of which is the saving and loan cooperative. Saving and loan cooperative is alternative 􀅫inancing for Indonesian people, especially businesses with little capital. The mechanism is possible through an instrument of a loan agreement and by providing Guarantees in the form of a Fiduciary. However, there will be problems if the cooperative save borrow is declared bankrupt against the guarantee given by members of the cooperative in the form of micro-businesses. This study uses the normative approach to examine secondary data in existing legal 􀅫ields as a literature review approach. The 􀅫inal results from the content analysis show that the legal status of 􀅫iduciary guarantees will still go into the bankruptcy model, whose management is carried out by the curator. However, the perpetrator still gets legal protection because the guarantee he gives is followed by the basic agreement, namely a loan agreement, so the curator can not sell the 􀅫iduciary guarantee before the basic agreement expires. These 􀅫indings indicated a legislative gap in the cooperative framework and highlighted the need to grab the attention of policy institutions for better business outcomes. The study brings several key insights for policymakers, business scholars, business law experts, and entrepreneurs.

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“…The enterprise dimension includes 7 indicators of employees' work attitude, employees' skill level, awareness of corporate social responsibility, corporate culture, professional ethics, corporate profit model, and employees' literacy; the legal dimension includes 3 indicators of the labor contract law, relevant laws and regulations and legal awareness, the government dimension includes 3 indicators of the government's executive power, the government's ability to administer in accordance with the law, and the social security system, and the social dimension includes the state of competition in the industry, labor market and economic environment [8][9][10]. There are advantages and disadvantages of the open-term labor contract; as long as it is used well, it has many positive effects on the enterprise, and solving this problem requires active participation from four aspects: from the enterprise level, the enterprise can be through the employee's work attitude, the enterprise's profit model, the enterprise's culture, the employee's skill level, the work ethic, the social security, the employee's skill level and so on are all factors affecting the relationship of the labor contract factors that affect the stability of labor contract relationship [11].…”

Section: Introductionmentioning

confidence: 99%

Empirical analysis of the stability of labor contract relationship and its influencing factors from the perspective of civil law

Zhang,

Qiu

2024

Applied Mathematics and Nonlinear Sciences

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Stable employment is a pivotal foundation for contemporary economic development and transformation. The enhancement of labor contract relationship stability is crucial for the great rejuvenation of the Chinese nation. Drawing from civil law and various research materials, this study identifies key factors influencing labor contract stability and posits several research hypotheses. This paper constructs a regression analysis model to examine the relationships between these factors and labor contract stability, where the influencing factors serve as independent variables and the stability of the labor contract relationship acts as the dependent variable. The model’s fit is rigorously evaluated. A preliminary analysis employing Pearson’s correlation coefficient reveals significant correlations between all 14 identified factors and the stability of labor contract relationships, supporting the use of regression analysis. Empirical results from the regression analysis indicate a significant positive impact of education level on labor contract stability (p = 0.031 < 0.05). Similarly, employment income is shown to positively influence labor contract stability (p = 0.009 < 0.05). Apart from education level and urban integration challenges, other identified factors also significantly affect the stability of labor contracts. This research not only advances our understanding of the dynamics influencing labor contract stability but also provides a robust empirical basis for shaping relevant civil law regulations and policies.

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How does legal design affect the initiation of a firm's bankruptcy?

Cited by 4 publications

References 74 publications

Duty calls: prediction of failure in reorganization processes

Duty calls: prediction of failure in reorganization processes

The legal status of fiduciary guarantee belongs to members of save and loan cooperatives due to bankruptcy

Empirical analysis of the stability of labor contract relationship and its influencing factors from the perspective of civil law

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