Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/218983
Authors: 
Kliatskova, Tatsiana
Savatier, Loïc Baptiste
Year of Publication: 
2020
Series/Report no.: 
DIW Discussion Papers No. 1862
Abstract: 
This paper investigates the effect of reforms of insolvency regulations on cross-border debt and equity investments at a sectoral level. Using disaggregated data from the Securities Holdings Statistics by Sector (SHSS) and OECD-indicators on the efficiency of insolvency regulations, we find that investors prefer to invest more in countries with more efficient insolvency frameworks. The effect, however, differs across sectors, with households and institutional investors being particularly sensitive. In addition, share-holders are mostly responsive to prevention and streamlining tools, while debt-holders respond more to availability of restructuring tools. Finally, we show that countries with developed financial markets and effective government are the ones that see the largest debt and equity inflows after reforms of insolvency regulations.
Subjects: 
capital market integration
insolvency law
sectoral effects
JEL: 
F21
G15
G33
Document Type: 
Working Paper

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