El ineficiente diseño de la legislación concursal española: Una propuesta de reforma a partir de la experiencia comparada y de un análisis económico del Derecho concursal [The inefficient design of the Spanish Bankruptcy Act: A proposal to enhance the attractiveness of the Spanish bankruptcy regime based on an economic and comparative analysis of insolvency law] in Spanish

• Main Author: Aurelio GURREA-MARTINEZ
• Format: text
• Language: Spanish
• Published: Institutional Knowledge at Singapore Management University 2016
• Subjects: bankruptcy law; law of secured transactions; bankruptcy reform; entrepreneurship; innovation; competitiveness; economic growth; Business Organizations Law; Commercial Law; European Law
• Online Access: https://ink.library.smu.edu.sg/sol_research/3641; https://ink.library.smu.edu.sg/context/sol_research/article/5599/viewcontent/SSRN_id2798561.pdf
• Institution: Singapore Management University

Spain has one of the world´s lowest business bankruptcy rates (that is, number of business bankruptcies per firm). Some authors have argued that the low usage of bankruptcy procedures in Spain is due to a ‘cultural’ problem faced by Spanish entrepreneurs. According to this hypothesis, the lack of a ‘bankruptcy culture’ makes Spanish entrepreneurs to be afraid of the use of the bankruptcy system. In this paper, however, I advocate for a totally different hypothesis. In my opinion, the low rate of business bankruptcies in Spain is not due to a ‘cultural’ problem but to an institutional one. Namely, I argue that the low rate of business bankruptcies is better explained by the unattractive insolvency regime for debtors and creditors traditionally existing in Spain, as well as other legal and institutional factors including a creditor-friendly corporate law, an efficient mortgage system, a rigid labor law, and a poor law of secured transactions. All these factors encourage both debtors and creditors to avoid the use of insolvency proceedings either by minimizing the risk of insolvency or by postponing -if possible, even avoiding- the bankruptcy system once a debtor becomes insolvent. The paper concludes by suggesting several recommendations to enhance the attractiveness of Spanish bankruptcy procedures.