Learning by Doing: Judge Experience and Bankruptcy Outcomes

Benjamin Charles Iverson, Joshua Madsen, Wei Wang, Qiping Xu

Research output: Working paper

Abstract

Exploiting the within-district random assignment of large corporate Chapter 11 filings, we estimate the costs of inexperience for bankruptcy judges. Inexperienced judges rule slower from the bench, and their cases spend more time in bankruptcy. Firms with inexperienced judges are less likely to reorganize and have lower debt recovery rates. The learning curve is approximately four years, but exposure to more corporate cases and a greater diversity of businesses accelerates judges' learning. The costs of inexperience are higher when courts are busy. Judges' general skill and personal attributes do not consistently explain case outcomes.
Original languageEnglish (US)
Number of pages52
DOIs
StatePublished - Dec 8 2017
Externally publishedYes

Keywords

  • Bankruptcy judges
  • human capital
  • learning by doing
  • job-specific skills

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