TY  - UNPD
A1  - Franks, Julian R.
A1  - Miao, Meng
A1  - Sussman, Oren
T1  - Resolving financial distress where property rights are not clearly defined: the case of China
N2  - We use data on financially distressed Chinese companies in order to study a debt market where property rights are crudely defined and poorly enforced. To help with identification we use an event where a business-friendly province published new guidelines regarding the administration and enforcement of assets pledged as collateral. Although by no means a comprehensive reform of bankruptcy law or property rights, by instructing courts to enforce existing, albeit rudimentary, contractual rights the new guidelines virtually eliminated creditors runs and produced a sharp increase in the survival rate of financially-distressed companies. These changes illustrate how piecemeal reforms of property rights and their enforcement may have a significant impact on economic outcomes. Our analysis and results challenge the view that a fully fledged system of private property is a precondition for economic development.
T3  - LawFin Working Paper - No. 49 
KW  - finance and development
KW  - property rights
KW  - financial distress
KW  - creditors runs
Y1  - 2022
UR  - http://publikationen.ub.uni-frankfurt.de/frontdoor/index/index/docId/68208
UR  - https://nbn-resolving.org/urn:nbn:de:hebis:30:3-682081
UR  - https://papers.ssrn.com/sol3/papers.cfm?abstract_id=4371798
VL  - November 25, 2022
PB  - Center for Advanced Studies on the Foundations of Law and Finance, House of Finance, Goethe University
CY  - Frankfurt am Main
ER  -