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Title: Giving zombie firms a second chance: An assessment of the reform of the Portuguese insolvency framework
Authors: Carreira, Carlos 
Teixeira, Paulino 
Nieto-Carrillo, Ernesto
Keywords: Insolvency regimes; Zombie firms; Productivity; Reallocation barriers; Firm exit; Restructuring
Issue Date: Dec-2022
Publisher: Elsevier
Project: Project ENtRY (PTDC/EGE-ECO/31117/2017) 
Serial title, monograph or event: Economic Analysis and Policy
Volume: 76
Abstract: In most advanced economies productivity growth has been hampered by barriers that allow zombie firms to survive. We examine the effectiveness of institutional reforms in Portugal that were aimed to improve efficiency in insolvency framework. Estimates show that reallocation barriers declined. The reforms appear to have larger and more effective results in zombie recovery than in exit. Firm size plays a major role in tackling zombie-entrenchment. The decline in barriers has also implied a lower distortion in the economy-wide selection process. The new setting seems to be more desirable than forcing zombie exit at all costs.
ISSN: 0313-5926
DOI: j.eap.2022.08.003
Rights: openAccess
Appears in Collections:I&D CeBER - Artigos em Revistas Internacionais

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