much scope to improve the design of insolvency regimes in order to reduce the barriers to restructuring of weak firms and … the personal costs associated with entrepreneurial failure. Insolvency regime reform can not only address the … markets. As the zombie firm problem may partly stem from bank forbearance, complementary reforms to insolvency regimes are …

This paper explores the link between the design of insolvency regimes across countries and laggard firms’ multi …-factor productivity (MFP) growth, using new OECD indicators of the design of insolvency regimes. Firm-level analysis shows that reforms to … insolvency regimes that lower barriers to corporate restructuring are associated with higher MFP growth of laggard firms. These …