Firm Finance and Bankruptcy on Empirical Study Using Korean Firm-Level Data

"The second paper estimates both bankruptcy costs and the debt recovery rate under the ""Korean Bankruptcy Act"". We analyze a sample of Korean business bankruptcies, which contains a total of 40 bankruptcy cases that formally closed. We obtain the following results: (i) The median bankruptcy cost standardized by assets at pre-filing under the ""Korean Bankruptcy Act"" is 4.6 percent. (ii) The median debt recovery rate standardized by assets at pre-filing under the ""Korean Bankruptcy Act"" is 57 percent while the median of shortfall is 43 percent. (iii) The median time in the ""Korean Bankruptcy Act"" is 924 days which is much longer than that in U.S. Chapter #7. (iv) There is a scale effect, i.e., the bankruptcy costs are inversely related to the size of firm. These results serve as legal parameters of the model and are crucial to study the optimal firm finance."

Name thesis:degree_name

Ph.D.

Level thesis:degree_level

Dissertation

Discipline thesis:degree_discipline

Economics

Grantor

University of Illinois at Urbana-Champaign

Year dc:date

2015

Author dc:creator

• Park, Chanho

Contributors dc:contributor

• Villamil, Anne P.

• Economics, Finance

Language dc:language

eng

Identifier

(MiAaPQ)AAI3130999

OAI identifier oai:identifier

oai:www.ideals.illinois.edu:2142/85545