Title: SME and Entrepreneurshiprelated Statistics For discussion: Entrepreneurship Policy Indicators for Ba
1SME and Entrepreneurship-related StatisticsFor
discussionEntrepreneurship Policy Indicators
for Bankruptcy Legislation Draft Final
ReportCFE/SME(2006)3
- Morten Larsen
- Seconded to the OECD,
- SME and Entrepreneurship Division of the Centre
for Entrepreneurship, SMEs and Local Development
(CFE) - National Agency for Enterprise and Construction
- FORA, Centre for Economic and Business Research
2Background
- 23rd session policy indicator project agreed on
by delegates - Three main themes chosen by Steering Group
- Bankruptcy
- Entrepreneurship Education (will be presented at
27th session) - Taxation
- Questionnaires developed with the OECD
Secretariat (SME and Entrepreneurship Division) - 24th session questionnaires discussed
- Questionnaires sent out and answered by national
policy experts - 25th session preliminary findings discussed
- 26th session Draft final report on bankruptcy
legislation presented (26 countries)
3Why did we undertake the project?
- Entrepreneurship is an important driver of growth
in the knowledge based economy - Bankruptcy legislation seems to be one among many
factors affecting entrepreneurial activity - Many countries are in the process of making their
bankruptcy legislation more entrepreneurship
friendly - But the guidelines for reform are limited
- Objective To gather information on national
specific regulation and government programmes
(policy indicators) related to bankruptcy - Identify range
- Situate countries
4The impact of bankruptcy legislation on
entrepreneurial activity
- 2 main theoretical arguments are put forward in
the literature - Ex ante incentives for risk taking
- The rational entrepreneur will consider costs and
benefits of going into business gt - Tough bankruptcy legislation may affect the
willingness of marginal entrepreneurs to enter
the marketplace - Ex post financial rehabilitation
- Limited chances of financial rehabilitation will
affect the ability of entrepreneurs to return to
the marketplace - Limited pool of potential entrepreneurs
- Additional argument Entrepreneurs learn from
their mistakes
5Findings from literature review
- Support for ex ante argument
- Severity of insolvency law seems to have an
impact on start up rate (Armour and Cumming,
2005, Fan and White, 2001) - Some support for ex post argument
- No financial rehabilitation reduces ability to
start again - Limited evidence for claim that entrepreneurs
perform better the second time - More research would be useful
6Findings from empirical research
- Wide variation in bankruptcy legislation across
countries - Early warning
- Out-of-court settlements
- Reorganisation
- Liquidation
- Discharge
7Early Warning Systems
8Out-Court-Settlements
9Reorganisation Plan
10Priority of national authorities
11 12Findings from empirical research
- The spectrum of bankruptcy legislation is very
wide - Outcome also seem very different
- Little evaluation and research in most countries
- Little knowledge of effect of bankruptcy
legislation
13Conclusions and policy implications
- Bankruptcy procedures reflect a country's
institutional structure and legal tradition and
there is a class of procedures that satisfy the
main criteria of efficiency (Hart, 1999) - If little variation existed it is likely that
policy learning would be limited - However, wide variation suggest that countries
can learn from each other and that improvements
are possible - It is likely that bankruptcy legislation is not
efficient in all countries - A national evaluation culture would be beneficial
- National evaluations of efficiency of
bankruptcy legislation and government programmes - No country specific policy recommendations in the
working paper - On the basis of the policy indicators countries
can identify alternative approaches to bankruptcy
and relevant countries for analyses and
comparison
14Ways to improve our understanding of the effect
bankruptcy legislation?
- Conduct peer reviews examine in more detail the
policy frameworks and highlight new areas and
directions in individual countries - Construct International comparable indicators
- Link indicators to various measures of
entrepreneurship
15Deadline for comments
- Deadline for written comments
- Tuesday 18 April 2006
- To
- Morten Larsen, mrl_at_ebst.dk
- Brynn Deprey, brynn.DEPREY_at_oecd.org
16Entrepreneurship Education economy survey
- 20 countries has answered
- Austria, Belgium, Canada, Czech Rep., Denmark,
Finland, France, Germany, Hungary, Ireland,
Japan, Korea, Mexico, Netherlands, New Zealand,
Norway, Poland, Spain, Sweden, Turkey - The Secretariat would kindly encourage the
countries who have not already replied to forward
their responses to - Morten Larsen, mrl_at_ebst.dk
- Brynn Deprey, brynn.deprey_at_oecd.org
17Entrepreneurship education university survey
- Almost 250 answers received
- 8. March Countries requested to sent reminder
out - Those who have not already done so are kindly
requested to do so - Draft final reports will be prepared for next
session of WPSME