Financial dependence, labour regimes and industry growth: Do creditor rights matter?

Abstract

Using 3-digit industry data at the state-level during 2009-2018, the paper assesses the impact of the Insolvency and Bankruptcy Code (IBC) on growth across industries with varying degrees of financial dependence. The findings show that IBC positively impacted industry growth, although this occurred by altering the capital-labour mix in favour of the latter. Robustness tests across industry type and state labour regimes support these findings.