Small businesses, the majority of Spanish firms, rarely file for formal bankruptcy when dealing with financial distress …. This is why business bankruptcy rates in Spain are among the lowest in the world, even during the current economic crisis …. To explain this fact we present the following hypothesis. Filing for bankruptcy in Spain is very costly for both small …

a hypothesis to explain why Spain has one of the world’s lowest business bankruptcy rates, even during the current … the Spanish bankruptcy system relative to that of an alternative insolvency institution, the mortgage system, and the … unattractiveness of the personal bankruptcy law ; Utilizando una amplia base de datos de más de 1 millón de empresas españolas …

liquidaciones ineficientes ; The paper warns about the potential efficiency losses associated with low business bankruptcy rates … (number of fi rms filing for bankruptcy as a proportion of the total stock of firms) and shows that welfare could be improved … by increasing the protection of creditors in the bankruptcy system. These ideas are illustrated with the Spanish case …