This research investigates how the legal sanctions prevailing under bankruptcy code impact on the design of debt contacts. Unlike most papers considering a passive behavior of the bank in case of default of the borrower, we assume the bank actively trades off between private renegotiation and...

We examine why banks resort to collateral, and whether their reasons vary according to the type of collateral. We use a unique dataset of bank loans granted to French distressed firms, which contains full information on the type and value of collaterals and the cause of firm default. Our work...

This research investigates how bankruptcy law influences the design of debt contracts and the investments choices. We model a lending relationship between a small firm and a monopolistic bank who decides the level of the interest rate. The firm may perform asset substitution, which is sanctioned...

The World Bank reports « Doing business » (2004, 2005 and 2006), referring to the main assumptions and findings of the « law and finance » theory, predict that the common law system provides better basis for financial development and economic growth than French origin civil law. This paper...

Literature on ex-ante efficiency of bankruptcy procedures investigates how these procedures influence the behavior of managers and creditors. We extend this literature by explaining how bankruptcy law can influence the design of debt contracts through the recovery process. We develop a model of...

We study the French dilemma associated with court administered resolution of corporate financial distress of firms, in which bankruptcy courts have to combine both social efficiency (maintaining employment) and ex post financial efficiency (determining the best issue for financial distress,...

Cet article soulève deux questions : les jeunes entreprises pérennes (dont l’activité dure au moins cinq ans, soit quatre publications de comptes) présentent-elles des caractéristiques distinctes selon l’origine de la création et ces caractéristiques induisent-elles des performances...