La ineficiencia del concurso de acreedores españolanálisis de las causas y modelo explicativo

Abstract

The present doctoral thesis entitled THE INEFFICIENCY OF THE BANKRUPTCY PROCESS IN SPAIN: AN ANALYSIS OF ITS CAUSES AND A EXPLANATORY MODEL, belongs to the interuniversity Phd Economic program in Business and Legal Sciences (3420) of the Escuela Internacional de Doctorado (International Doctoral School) of the Universidad Politécnica de Cartagena (Technical University of Cartagena) RD 99/2001, of January 28, by which the official PhD programs are regulated and is presented with the aim of obtaining the Doctor official title (PhD). The main motivation of this study derives from the need to understand a phenomenon, the bankruptcy of creditors in Spain, which is of great importance for the economy and the welfare of citizens. In the present, the inefficiency of the bankruptcy in Spain is studied, showing empirical evidence of the causes and proposing a model that explains it so that economic agents can act consistently and with scientific criteria. The thesis is structured in three fundamental chapters. In chapter 1, the analysis is contextualized by addressing the economic situation, the failure of businesses and the bankruptcy declaration in Spain as a particular feature of business failure since it is the legal solution to it. This work shows the evidence of the obvious inefficiency of the bankruptcy legal procedure in Spain as shown by the scientific literature consulted, the explanatory statement of intentions of the bankruptcy law and its multiple reforms, the descriptive statistics of the INE (Spanish National Institute of Statistics), the insolvency records of the Colegio de Registradores (Registers College) and the evidence of this thesis itself. Chapter 2 shows a descriptive analysis of the bankruptcy declarations in Spain at a geographical level and an empirical study is carried out using Exploratory Spatial Data Analysis to check if, in addition, there is a contagion effect between the different Spanish provinces during the period 2005 to 2013. The variable under study is the number of bankruptcy declarations in each period, for each province, globally and for two important economic sectors, the industrial sector and the construction sector. Two types of analysis have been carried out. The first, exploratory, which reflects the distribution of the phenomenon at the provincial level, through the quartile maps and frequency histograms. The second analysis tries to contrast the hypothesis of contagion between the provinces, both spatial and space-time, through the I of Moran. The analyses have shown interesting evidence about the phenomenon in both the descriptive aspect and in the study of contagion, leaving the doors open to new lines of research derived from the conclusions of the present study. The two most outstanding results are, on the one hand, the existence, for the whole observed period, of a clear northwest-southeast diagonal that divides the territory into two, with a greater concentration of bankruptcy declarations at the top of that diagonal. On the other hand, the evidence of the existence of a contagion effect at a global level between neighbouring provinces (or positive spatial autocorrelation) with a significance sometimes higher than 99%. This contagion effect occurs mainly in the industry sector, but it does not exist for the construction sector though. Chapter 3 deals with the efficiency of the bankruptcy procedure, through the analysis of the influence of agency costs in a second empirical study where the role of the main financial ratios is analysed in order to discriminate between those companies that finish their insolvency with a creditors’ agreement, and therefore the bankruptcy procedure has finished efficiently, from those that went liquidated. In addition, some proposed research hypotheses are tested and a model that tries to explain the said inefficiency is carried out. Thus, in this chapter two analysis are carried out. On one hand, the analysis of the difference in means for the companies’ main financial ratios between the group of firms that, after entering the bankruptcy process, end up with a creditors’ agreement, compared to those that ended up in liquidation, as well as in the role that different agency costs associated with the diverse economic agents had in them, that is, the bankruptcy administrator belonged or not to a Big4 company, their retribution, as well as judicial efficiency. On the other hand, these variables are analysed through a Logit analysis in an attempt to establish a model that tries to explain the inefficiency of the bankruptcy procedure in Spain, finding significant evidence that these variables influence on the different resolution of the process. Four hypotheses are proposed: H1: Companies that conclude the bankruptcy procedure have better values for the liquidity, solvency, profitability and rotation ratios when bankruptcy started, compared to those that ended up in liquidation. H2: A bankruptcy procedure managed by a bankruptcy administrator that belongs to the Big4 will increase the likelihood that the process will end up in a creditors’ agreement and not in liquidation. H3: Higher retribution will increase the likelihood that the process will end in a creditors’ agreement and not in liquidation. H4: Greater judicial efficiency will increase the likelihood that the process will end in a creditors’ agreement and not in liquidation. The main results obtained in this study are that there are differences of means between the group of companies that conclude with a creditors’ agreement and the group of firms that conclude in liquidation with respect to their liquidity, solvency, profitability, rotation ratios and size, although there is not a significant difference in age. Regarding the contingency tables, there are differences between the two groups depending whether the manager belongs to the Big4 or not and if the bankruptcy administrator is paid above or below the average. With respect to the results of the hypotheses, the first hypothesis is fulfilled, that is, the previous situation of the insolvent debtor, in relation to its position of liquidity, solvency and size, are decisive in the outcome of the bankruptcy procedure. The hypothesis that deals with the existence of agency costs between the bankruptcy administrator and the creditors is partially fulfilled, since the second hypothesis of belonging to the Big4s is corroborated but the third hypothesis is only fulfilled in the univariate analysis and not in the multivariate model, which may mean that retribution is determinant accompanied or influenced by other variables, such as size, but never by itself. Regarding the fourth hypothesis, some of the used proxies about judicial efficiency certify the existence of differences between the different courts and some other proxies do not. The main conclusions are that the inefficiency of bankruptcy is a stylised fact and that the causes of it are the situation of liquidity, solvency, profitability and size of the insolvent debtor. These results are in line with those given in pre-existing studies of business failure. The existence of agency costs between the bankruptcy administrator and the creditors is verified given the differences between the group of companies that end up with a creditors’ agreement and those that finish liquidated. Finally, several models were tested by running logit regressions, which show, in all of them, that the inefficiency of the bankruptcy proceeding is explained by the size and structure of the assets and liabilities of the insolvent company and the sales. The better resolution of the bankruptcy process is positively influenced by having a greater size, an adequate structure of the current assets with respect to total assets and liabilities, and a higher rotation. From the rest of the variables, the only ones showing significance have been the fact that the bankruptcy administrator belongs to the Big4 (in a positive way), and several proxies for the judicial efficiency, although the results have not been conclusive for all cases due to the probable widespread collapse existing since 2009 and the fact that the year of the bankruptcy declaration was before the economic recession.