Bankruptcy law severity for debtors : comparative analysis among selected countries

Purpose: The objective of this paper is to propose the new indicator of bankruptcy law severity for debtors (BLSI-Bankruptcy Law Severity Index). On the basis of this index we conducted comparative analysis of debtor/creditor friendliness of bankruptcy laws among 27 selected countries. Design/Methodology/Approach: In the research the following methods were used: analysis of legal acts, literature review and expert method. Findings: The empirical results show that the most debtor-friendly bankruptcy and restructuring laws are those of the USA, Ireland and Canada. At the opposite pole were Slovenia, Australia and Austria. It can also be noted that many EU countries have a similar level of BLSI measure, which is most likely a consequence of harmonisation activities undertaken within the Community. Practical Implications: The conducted research enables us to propose the direction of changes in bankruptcy and restructuring laws in the next stage. Originality/value: On the basis of proposed BLSI, we will be able to examine the relationship between the severity of bankruptcy law and innovation, entrepreneurship and the level of development of financial markets in the studied countries.peer-reviewe