Insolvency law in emerging markets

• Main Author: Aurelio GURREA-MARTINEZ
• Format: text
• Language: English
• Published: Institutional Knowledge at Singapore Management University 2020
• Subjects: insolvency law; corporate law; Business Organizations Law; Commercial Law
• Online Access: https://ink.library.smu.edu.sg/sol_research/3704; https://ink.library.smu.edu.sg/context/sol_research/article/5662/viewcontent/Insolvency_Law_in_Emerging_Markets_HarvardLSBlog_2020_av.pdf
• Institution: Singapore Management University

Corporate insolvency law can serve as a powerful mechanism to promote economic growth. Ex ante, a well-functioning insolvency framework can facilitate entrepreneurship, innovation and access to finance. Ex post, corporate insolvency law can perform several functions, including the reorganization of viable companies in financial distress, the liquidation of non-viable businesses in a fair and efficient manner, and the maximization of the returns to creditors. Therefore, if having an efficient corporate insolvency framework is essential for any country, it becomes even more important for emerging economies due to their potential for growth and their greater financial needs.