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Corporate insolvency - Statistics & Facts

Simply put, insolvency is a situation where a business is not able to pay its debts. Should the company not be able to locate additional funds to pay debt that are due (e.g. through taking on additional debt), they can then legally file for bankruptcy. On filing for bankruptcy the company is dissolved and its assets are sold (usually by a third party such as a law firm), with the money received being divided between the company’s creditors. Often this process often takes a year or more to be completed, although this varies significantly between countries. As a rule, creditors do not receive the full amount they are owed when a company files for bankruptcy. In most countries, a condition for filing for bankruptcy is that the company’s assets are not sufficient to cover the total amount of debts they owe -- often with the outstanding debt being many times higher than the value of the underlying assets. While this general outline of the bankruptcy process applies to most countries, there are many small differences in procedure and terminology between countries. For example, in Australia the term bankruptcy only applies to individuals, with the corresponding process for businesses being termed liquidation.

Not only does the legal framework around insolvency vary between countries, but also the frequency with which it is used. In 2019, the country with the most business insolvencies was France, whose 52,100 insolvencies was just over twice that of the next-highest country, the United States. The United Kingdom was third with only slightly less insolvencies than the U.S. -- despite the massive difference in the size of these economies. Differences in the level of insolvencies between countries are a result of both economic and institutional factors. For example, the number of business insolvencies in China has grown dramatically in recent years, increasing almost fourfold since 2015 to reach 12,750 in 2019. While this increase is due in part to the growth of corporate debt in China over this period, it also reflects changes made to bankruptcy processes. In 2007, the Chinese bankruptcy code was overhauled, and specialized courts for bankruptcy proceedings were established between 2007 and 2017. Prior to this, bankruptcy cases were handled by local courts, which lacked the resources, expertise, and incentives to resolve cases in a timely manner.


Bankruptcy growth trends over the last decade also differ greatly between countries. While some countries have seen their number of bankruptcies decrease following a spike from the financial crisis of 2008/09, other countries have seen their number of insolvencies increase over the last decade. The United States and Japan are examples of the former trend, while Turkey and South Africa are examples of the latter. A greater level of consistency is found across countries when considering bankruptcies in terms of industry though, with the personal services, construction, and retail sectors tending to experience the highest number of bankruptcies. This pattern holds for most developed countries, being evident in economies as diverse as Canada, Belgium, and Japan. However, a different picture emerges from developing economies, with professional services having the highest instance of business liquidations in South Africa, while this dubious honor goes to the manufacturing sector in India.

Divergence between countries are also likely to be seen with how the coronavirus pandemic (COVID-19) affects global business bankruptcy rates. Given that many countries have restricted trading for many businesses in the personal services and retail sectors (owing to their dependence on face-to-face contact), and that these sectors have consistently high bankruptcy rates, the global pandemic may greatly increase the number of bankruptcies in these sectors. Moreover, the broader economic uncertainty created by the crisis will likely depress consumer confidence, increasing the likelihood of bankruptcies across all industries. However, many countries have also offered unprecedented levels financial support to businesses, which may partially mitigate the worst effects of the crisis in some countries. In addition, countries have been affected differently by the crisis, meaning those countries able to safely ease trading restrictions sooner may see a lower rise in their bankruptcy rates.

Interesting statistics

In the following 5 chapters, you will quickly find the 29 most important statistics relating to "Corporate insolvency".

Corporate insolvencies worldwide

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Important key figures

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Insolvency in North America

Insolvency in Europe

Insolvency in Asia-Pacific

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