Entrepreneurs’ legal infractions and hidden information
Evidence from small business bankruptcies
Bibliographic Data
| ID | 21451783 |
|---|---|
| Authors | Stefan Sundgren (0000-0002-2496-108X, Statistics Sweden, corresponding author), Irina Alexeyeva (0000-0001-5804-9454, Umeå University) |
| Year | 2022 |
| Volume | 69 |
| Pages | 106044 |
| Publication date | 2022-03-01 |
| Peer Reviewed | Yes |
| Open Access | Yes |
| Type | ARTICLE |
| Venue | International Review of Law and Economics (JOURNAL) |
| Journal identifiers | ISSN: 0144-8188 • E-ISSN: 1873-6394 |
| Publisher | Elsevier BV (PUBLISHER) |
| DOI | 10.1016/j.irle.2021.106044 |
| OpenAlex | W4206199909 |
| Language | EN |
| Citations received | 1 |
| References cited | 52 |
We study how entrepreneurs’ attitudes toward risk, as measured by their personal legal infractions, are related to information asymmetry and agency problems prior to bankruptcy, using a sample of 260 small Swedish firms. We find that auditor resignations are more likely in firms where entrepreneurs have legal infractions. Furthermore, we find that legal infractions are negatively related to the likelihood of a firm disclosing its annual report and the quality of the bookkeeping, suggesting that information asymmetry problems are more severe when the entrepreneurs have legal infractions. We also find that creditors’ recovery rates in bankruptcy are lower if the entrepreneurs have legal infractions related to serious traffic offences, such as driving under the influence of alcohol or without a license
Accrual · Actuarial science · Agency (philosophy) · Audit · Bankruptcy · Business · Creditor · Debt · Enforcement · Information asymmetry · License · Political science · Quality (philosophy) · Sample (material) · Small business · Accounting · Auditing, Earnings Management, Governance · Corporate Finance and Governance · Finance · Financial Distress and Bankruptcy Prediction · Law
Applied Logistic Regression
Ebalance
Causal Mediation Analysis
Entropy Balancing is Doubly Robust
A more complete conceptual framework for SME finance
Theory of the firm
Mediation Analysis
Debt-to-equity conversion in bankruptcy reorganization and post-bankruptcy firm survival
Creditor information registries and relationship lending
The Development of Persistent Criminality
Parental Efficacy, Self-Control, and Delinquency
Is the Public Oversight of Auditors Effective? The Impact of Sanctions on Loss of Clients, Salary and Audit Reporting
Participation in Illegitimate Activities
Crime and Punishment
The Pricing of Options and Corporate Liabilities
Microeconometrics; Methods and Applications
Entropy Balancing for Causal Effects
A Behavioral Approach to Law and Economics
Reconsidering Baron and Kenny
| Unique citing works | 1 |
|---|---|
| Citations per year | 0.25 |
| Citation span | 2022 - 2022 (1) |
| Citation velocity | historical |
| Highly cited | No |
| Citation types | Neutral: 1 |