Corpus ID: 15318321

Financial Innovations and Corporate Insolvency

  title={Financial Innovations and Corporate Insolvency},
  author={J. Franks and O. Sussman and Ken Klee and Dan Bussel and H. Rajak and F. Allen and P. Bolton and J. Bonin and Mark Britten-Jones and Ian A M Cooper and M. Rin and J. Dow and Ron Giammarino and D. Goldreich and M. A. Habib and D. Hirshleifer and J. Jackwerth and Jan Mahrt-Smith and S. Lohman and K. Nyborg and C. Mayer and A. Neuberger and Eric Posner and A. R{\"o}ell},
  • J. Franks, O. Sussman, +21 authors A. Röell
  • Published 1999
  • Business
  • In this paper we develop a corporate-finance oriented theory of financial innovations. The theory is motivated by the different corporate insolvency procedures in England and America. In the paper’s empirical section we show that these procedures have emerged from different innovation regimes. English law was innovated by lenders and borrowers exercising their right to contract freely, while American law was innovated by judges and legislators whose intervention often violated pre-contractual… CONTINUE READING
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