Bankruptcy laws and ambitious entrepreneurship: A replication with extensions

Bankruptcy laws matter to ambitious entrepreneurship, yet there are conflicting views on this relationship. This study replicates the pioneering work of Estrin et al. (2017) by utilizing more recent data covering a broader range of countries and extends it by taking key entrepreneurial characteristics (gender, fear of failure, and self-efficacy) as contingencies. Grounded in institutional theory and drawing on 37,377 observations from 104 countries and regions between 2010 and 2020, this study finds that creditor-oriented bankruptcy laws are negatively associated with ambitious entrepreneurship, providing further support for the findings of Estrin et al. (2017). Building on a social cognitive perspective, it further shows that this negative association is stronger among female entrepreneurs and those with high fear of failure or low self-efficacy. This study advances our knowledge of the implications of bankruptcy laws for ambitious entrepreneurship, especially by showing how this relationship depends on entrepreneurial characteristics. It also helps explain cross-country variation in ambitious entrepreneurship, thereby contributing to the comparative international entrepreneurship perspective.