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A resource-based analysis of bankruptcy law, SMEs and corporate recovery

Research output: Contribution to journalJournal article

<mark>Journal publication date</mark>05/2012
<mark>Journal</mark>International Small Business Journal
Issue number3
Number of pages19
Pages (from-to)275-293
Publication StatusPublished
<mark>Original language</mark>English


The UK Company Voluntary Arrangement (CVA) is an early example of a bankruptcy regime designed to aid the rescue of financially distressed SMEs. Its efficacy hinges on its application to aid only viable companies with liquidation as the preferred option for companies that are not viable. This article proposes the resource-based view as a theoretical means to assess the viability of bankrupt SMEs. Seven hypotheses are tested and provide support for the central proposition, that a company which has resource strength, but is pushed into bankruptcy by temporary factors, is more likely to succeed in a CVA. The article concludes that the resource-based view is useful for analysing the viability of bankrupt companies and that well-designed bankruptcy law can promote SMEs and entrepreneurship.