Policy Guidance,Political Turnovers,and Corporate Bankruptcy—Evidence from Court Filings
Using court judgments to investigate the impact of central policy orientation and local offi-cial turnovers on corporate bankruptcy,we exploit the 2016 corporate bankruptcy reform and local official turnovers to conduct staggered difference-in-differences analysis.We find that official turnovers after 2016 increase the number of local bankruptcy cases and bankruptcy infrastructure.The impact is more pro-nounced in cities with new officials who are nonlocal or come from higher-level governments,but remains muted before 2016,suggesting the key role of central policy orientation.Our findings reveal the impor-tance of the central-local government interactions for shaping the bankruptcy institution.
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