IDEAS home Printed from https://ideas.repec.org/a/sae/urbstu/v54y2017i16p3738-3754.html
   My bibliography  Save this article

Spatial variations in personal insolvency choices: The role of stigma and social capital

Author

Listed:
  • Paul Bishop

Abstract

This article offers an explanation for the wide spatial variations in choice of insolvency route by personal debtors across local authorities in England and Wales. It is argued that formal bankruptcy has a more negative impact on social capital through stigma effects than the alternative of Individual Voluntary Arrangements. Consequently, spatial variations in choices are related to variations in social capital. The hypotheses derived from this approach are tested through the use of spatial econometric models utilising data from England and Wales. The results provide support for a positive link between variables related to social capital (age, mobility and home ownership) and choice of IVAs. It is argued that avoidance of stigma costs provides an explanation for the apparent paradox of the significant growth of IVAs despite their high cost to debtors compared to bankruptcy. Whilst there is only limited support for impacts directly related to the urban-rural environment, significant spatial interdependencies in choices across neighbouring areas are also uncovered.

Suggested Citation

  • Paul Bishop, 2017. "Spatial variations in personal insolvency choices: The role of stigma and social capital," Urban Studies, Urban Studies Journal Limited, vol. 54(16), pages 3738-3754, December.
    • Handle: RePEc:sae:urbstu:v:54:y:2017:i:16:p:3738-3754
    DOI: 10.1177/0042098016679765
    as

    Download full text from publisher

    File URL: https://journals.sagepub.com/doi/10.1177/0042098016679765
    Download Restriction: no
    File URL: https://libkey.io/10.1177/0042098016679765?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    References listed on IDEAS

    as
    1. Akçomak, İ. Semih & ter Weel, Bas, 2012. "The impact of social capital on crime: Evidence from the Netherlands," Regional Science and Urban Economics, Elsevier, vol. 42(1-2), pages 323-340.
    2. Bradley A. Hansen & Mary Eschelbach Hansen, 2008. "Religion, Social Capital, and Business Bankruptcy in the United States, 1921-1932," Working Papers 2008-15, American University, Department of Economics.
    3. Kelejian, Harry H. & Prucha, Ingmar R., 2010. "Specification and estimation of spatial autoregressive models with autoregressive and heteroskedastic disturbances," Journal of Econometrics, Elsevier, vol. 157(1), pages 53-67, July.
    4. Edward L. Glaeser & David Laibson & Bruce Sacerdote, 2002. "An Economic Approach to Social Capital," Economic Journal, Royal Economic Society, vol. 112(483), pages 437-458, November.
    5. Matthew Roskruge & Arthur Grimes & Philip McCann & Jacques Poot, 2013. "Homeownership, Social Capital and Satisfaction with Local Government," Urban Studies, Urban Studies Journal Limited, vol. 50(12), pages 2517-2534, September.
    6. Michelle J. White, 2005. "Economic Analysis of Corporate and Personal Bankruptcy Law," NBER Working Papers 11536, National Bureau of Economic Research, Inc.
    7. Buckley, F H & Brinig, Margaret F, 1998. "The Bankruptcy Puzzle," The Journal of Legal Studies, University of Chicago Press, vol. 27(1), pages 187-207, January.
    8. Paul Bishop, 2013. "The Spatial Distribution of Personal Insolvencies in England and Wales, 2000--2007," Regional Studies, Taylor & Francis Journals, vol. 47(3), pages 419-432, March.
    9. Bradley Hansen & Mary Eschelbach Hansen, 2008. "Religion, social capital and business bankruptcy in the United States, 1921-1932," Business History, Taylor & Francis Journals, vol. 50(6), pages 714-727.
    10. Debertin, David L. & Goetz, Stephan J., 2013. "Social Capital Formation in Rural, Urban and Suburban Communities," Staff Papers 159102, University of Kentucky, Department of Agricultural Economics.
    11. Agarwal, Sumit & Chomsisengphet, Souphala & Liu, Chunlin, 2011. "Consumer bankruptcy and default: The role of individual social capital," Journal of Economic Psychology, Elsevier, vol. 32(4), pages 632-650, August.
    12. Paolo Di Martino, 2005. "Approaching Disaster: Personal Bankruptcy Legislation in Italy and England, c.1880-1939," Business History, Taylor & Francis Journals, vol. 47(1), pages 23-43.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Hansen, Mary Eschelbach & Hansen, Bradley A., 2012. "Crisis and Bankruptcy: The Mediating Role of State Law, 1920–1932," The Journal of Economic History, Cambridge University Press, vol. 72(2), pages 448-468, May.
    2. Michel Robe & Eva Maria Steiger, 2016. "Insolvency and its Consequences: A Historical Perspective," ifo DICE Report, ifo Institute - Leibniz Institute for Economic Research at the University of Munich, vol. 13(4), pages 35-40, 02.
    3. Sarah Brown & Pulak Ghosh & Karl Taylor, 2016. "Household Finances and Social Interaction: Bayesian Analysis of Household Panel Data," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 62(3), pages 467-488, September.
    4. Song Han & Wenli Li, 2007. "Fresh Start or Head Start? The Effects of Filing for Personal Bankruptcy on Work Effort," Journal of Financial Services Research, Springer;Western Finance Association, vol. 31(2), pages 123-152, June.
    5. Sarah Brown & Karl Taylor, 2012. "Household Finances and Social Interaction," Working Papers 2012007, The University of Sheffield, Department of Economics.
    6. Akcomak, Semih, 2009. "Bridges in social capital: A review of the definitions and the social capital of social capital researchers," MERIT Working Papers 2009-002, United Nations University - Maastricht Economic and Social Research Institute on Innovation and Technology (MERIT).
    7. Domínguez, Magdalena & Montolio, Daniel, 2021. "Bolstering community ties as a mean of reducing crime," Journal of Economic Behavior & Organization, Elsevier, vol. 191(C), pages 916-945.
    8. Julie L. Hotchkiss & Anil Rupasingha, 2021. "Individual social capital and migration," Growth and Change, Wiley Blackwell, vol. 52(2), pages 808-837, June.
    9. Emanuela Marrocu & Raffaele Paci, 2013. "Regional Development and Creativity," International Regional Science Review, , vol. 36(3), pages 354-391, July.
    10. Argentiero, Amedeo & Cerqueti, Roy & Sabatini, Fabio, 2021. "Does social capital explain the Solow residual? A DSGE approach," Structural Change and Economic Dynamics, Elsevier, vol. 58(C), pages 35-53.
    11. Chintal Desai & Gregory Elliehausen & Jevgenijs Steinbuks, 2013. "Effects of Bankruptcy Exemptions and Foreclosure Laws on Mortgage Default and Foreclosure Rates," The Journal of Real Estate Finance and Economics, Springer, vol. 47(3), pages 391-415, October.
    12. Richard H. Rijnks & Stephen Sheppard, 2018. "Occupant Well-Being and House Values," Department of Economics Working Papers 2018-05, Department of Economics, Williams College.
    13. Roskruge, Matthew & Poot, Jacques, 2024. "The Relationship between Social Capital and Migrant Integration, Ethnic Diversity, and Spatial Sorting," IZA Discussion Papers 17012, Institute of Labor Economics (IZA).
    14. Trent A. Engbers & Michael F. Thompson & Timothy F. Slaper, 2017. "Theory and Measurement in Social Capital Research," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 132(2), pages 537-558, June.
    15. Raffaele Paci & Emanuela Marrocu, 2014. "Tourism and regional growth in Europe," Papers in Regional Science, Wiley Blackwell, vol. 93, pages 25-50, November.
    16. K. Parboteeah & Sascha Walter & Jörn Block, 2015. "When Does Christian Religion Matter for Entrepreneurial Activity? The Contingent Effect of a Country’s Investments into Knowledge," Journal of Business Ethics, Springer, vol. 130(2), pages 447-465, August.
    17. repec:ces:ifodic:v:13:y:2016:i:4:p:19191585 is not listed on IDEAS
    18. Zhiling Wang, 2020. "The incompatibility of local economic prosperity and migrants’ social integration: evidence from the Netherlands," The Annals of Regional Science, Springer;Western Regional Science Association, vol. 64(1), pages 57-78, February.
    19. Julie L. Hotchkiss, 2019. "US Decennial Census return rates: the role of social capital," International Journal of Social Economics, Emerald Group Publishing Limited, vol. 46(5), pages 648-668, January.
    20. Feng, Yuruo & Hao, Wei & Fang, Jiali & Wongchoti, Udomsak, 2024. "In the radiance of enlightenment: The influence of nontheistic religions on corporate default risk," Emerging Markets Review, Elsevier, vol. 60(C).
    21. Michel Robe & Eva Maria Steiger, 2016. "Insolvency and its Consequences: A Historical Perspective," ifo DICE Report, ifo Institute - Leibniz Institute for Economic Research at the University of Munich, vol. 13(04), pages 35-40, February.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:sae:urbstu:v:54:y:2017:i:16:p:3738-3754. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: SAGE Publications (email available below). General contact details of provider: http://www.gla.ac.uk/departments/urbanstudiesjournal .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.