We study the access to credit and the propensity to exit the market of firms with no bank debt (the main funding source of Spanish non-listed firms) around the Covid-19 crisis. Our methodology enables us to disentangle credit supply from credit demand, as having no bank debt may be due to...

Spain has the world’s lowest business bankruptcy rate (number of formal business bankruptcies divided by number of firms). We document this fact, analyze the Spanish institutional framework and compare it with those of other European countries. We argue that a way to organize the documented...

The literature has found that the size of firms matters for innovation and productivity and, thus, for economic performance. It is therefore worth explaining why enterprises in Spain are small in international terms. Our findings indicate that the quality of the institutional environment plays a...

Taking advantage of a rich database of more than 1 million companies in Spain, France and the U.K., we propose and test a hypothesis to explain why Spain has one of the world’s lowest business bankruptcy rates, even during the current economic crisis and after controlling for market exit...

The paper warns about the potential efficiency losses associated with low business bankruptcy rates (number of firms 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....