The state‐level exemption changes in Chapter 7 protection and entrepreneurial activity in the United States

Patel, Pankaj C.; Devaraj, Srikant

doi:10.1002/mde.3293

Cited by 3 publications

(2 citation statements)

References 26 publications

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“…However, they could not produce notable results to justify their hypothesis. Patel and Devaraj [ 41 ] also examined the US state-level exemptions, their changes in legislation, and their effect on entrepreneurial activity. They concluded that entrepreneurial activity did not improve due to asset protection in personal bankruptcy systems.…”

Section: Review Of the Literaturementioning

confidence: 99%

How does the leniency of personal bankruptcy law affect entrepreneurship in EU countries?

Walter

Illés²,

Tóth³

2022

PLoS ONE

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Several studies examined how some characteristics of personal bankruptcy laws influenced entrepreneurial developments during the last two decades. Our main objective is to analyze the association between self-employment and the leniency of the personal bankruptcy systems in 24 EU countries. Unlike previous studies, we measure differences and changes in the leniency of the regulations with a composite index that incorporates 35 variables. Based on a cross-country database of self-employment ratios and various control variables spanning the years 2000 to 2019, we apply a panel regression model. We find that the implementation of new regulations and reforms in personal bankruptcy legislation in more lenient directions positively correlates with entrepreneurial developments measured by self-employment rates. This is more significant in the group of countries where the eligibility criteria for entrepreneurs are not constrained. We find a one-year negative time-lag effect and conclude that strong anticipation of the law for a more lenient system can immediately change the risk-reward profile, and thereby influence entrepreneurship before implementing the actual reform. An important policy implication is that a major reform in regulation or the first implementation of conservative legislation has the same order of magnitude of effect on promoting entrepreneurship as other public policy reforms of similar purpose.

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Section: Review Of the Literaturementioning

confidence: 99%

How does the leniency of personal bankruptcy law affect entrepreneurship in EU countries?

Walter

Illés²,

Tóth³

2022

PLoS ONE

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“…It showed a positive impact from the homestead exemption on entrepreneurship development only among the states in the bottom quartile and otherwise highlighted a negative impact. Patel and Devaraj (2021) examined the state-level exemption changes in the US and their effect on entrepreneurial activity. However, their results did not support the view that asset protection in personal bankruptcy systems improved entrepreneurial activity.…”

Section: Literature Reviewmentioning

confidence: 99%

The Leniency of Personal Bankruptcy Regulations in the EU Countries

Walter¹,

Krenchel²

2021

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Discussions on personal bankruptcy regulations are usually focused on the controversial effects of leniency on society, economy, financial markets, entrepreneurship, and labour supply. However, the methodology of measuring leniency has been limited to one-time legislative changes or some elements of the US personal bankruptcy system. In contrast, we create a composite index of personal bankruptcy legislations. We calculate the composite index for 25 EU countries and the US as a benchmark, validate the results, and rank the countries according to the leniency of their personal bankruptcy systems. We analyse the index scores by region, law origin, and the age of the regime. We conclude that the systems show high heterogeneity and cannot be clustered by region or legal origin assumed based on former studies. However, there is a strong association between leniency and the age of legislation. Results indicate that personal bankruptcy policies in the EU are usually launched as creditor-friendly and are later shifted to a more lenient direction.

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Public Policy Impacts on Entrepreneurial Entry and Exit: A Real Options Framework

Parker

2024

AMP

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The state‐level exemption changes in Chapter 7 protection and entrepreneurial activity in the United States

Cited by 3 publications

References 26 publications

How does the leniency of personal bankruptcy law affect entrepreneurship in EU countries?

How does the leniency of personal bankruptcy law affect entrepreneurship in EU countries?

The Leniency of Personal Bankruptcy Regulations in the EU Countries

Public Policy Impacts on Entrepreneurial Entry and Exit: A Real Options Framework

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