What is it about?

Firms' financial stability represents one of the most important aspects for entrepreneurs. In recent years, the European Commission have started to provide new recommendations for the Member States in order to sustain the “honest entrepreneurs” in their activities through new specific regulations on firms' insolvency. Furthermore, the Member States have favored these processes through the introduction in their legal systems of new tools to sustain the voluntary adoption of more ethical business models. An example is represented by the Italian context where the regulator introduced a legality rating (LR) to reward entrepreneurs that voluntarily act ethically. In order to evaluate the effects connected to the LR voluntary adoption, we have analysed the relationship between its adoption and firms' Z-Score.

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Why is it important?

This is one of the first attempts to assess the relationship between CSR and bankruptcy


Our findings suggest that regulators could introduce within their jurisdictions new tools in order to sustain enterpreneurs.

Simone Pizzi
Universita del Salento

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This page is a summary of: Does it pay to be an honest entrepreneur? Addressing the relationship between sustainable development and bankruptcy risk, Corporate Social Responsibility and Environmental Management, February 2020, Wiley, DOI: 10.1002/csr.1901.
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