The Geography of Bankruptcies and Social Inequalities

French original text :
« Géographie des faillites d’entreprises et inégalités sociales »

Traduction by :
Mathieu Dupuis, Professor of Work Relations-TELUQ

At the beginning of 2017, I was invited to present the statistical part of my research on business failure at the conférence introductive du module « Analyse quantitative » des APN-SHS (Ateliers Pratiques Numériques en SHS). After the presentation, during the discussion, someone in the crowd asked me if there was any data, in those I had collected, that I had not exploited. After a short moment of thinking, I had to acknowledge the fact that I had not been able to exploit effectively geographical data. But it had an impact on my perseverance and this question had revived it!  🙂

The first statistical experiences with geographical data that I had – the address of business failures between 2006 and 2014 – consisted to geo-localized each enterprises. I was doubtful of the first handlings because I had a map heavily in ‘patchwork’ and without any tendency. Concerning the second handling, I had to withdraw a map where firms were located in the area of ‘Lyon-Villeurbanne’ and were spreading particularly in the Eastern suburban. When you are minimally aware of the Lyon’s territory, this configuration is logical and it does not have any value-added, excepted that the business failures are located where the enterprises’ stock are more important. In sum, these first tries made me prudent concerning the space (in a literal sense, not a bourdieusian one!) of business failures. But it was without counting on my extraordinary resources  😉

More seriously, I re-started on the basis of what is a business failure today, that there are three possible procedures for an enterprise when there is suspension of payments: the compulsory liquidation (Liquidation judiciaire), the judicial reorganization (Redressement judiciaire), and the saving (Sauvegarde) – to know more on these three procedures, find info here. In fact, there is 80% of liquidation, 19% of reorganization, and 1% of saving. Thus, in terms of business failures, we have a mass procedure (Compulsory Liquidation), a subsidiary procedure (Judicial Reorganization) and an exception procedure (Saving).

Compulsory Liquidation Judicial Reorganization Saving
Mass Procedure Subsidiary Procedure Exception Procedure

Taking a spatial approach, many questions arose from this:

  • Which are the territories where there is savings?
  • Which are the territories where there are reorganizations?
  • Which are the territories where there were only liquidations?
  • Are there any territories where liquidations are minor?

So the answer is… on the basis of the data of business failures between 2006 and 2014 at the Commercial court of Lyon, we can distinguish 6 territories: 1. All three procedures were used. 2. Reorganizations and liquidations were used. 3. Liquidations were used and there were failed attempts of reorganization. 4. There are only liquidations. 5. A group of atypical communes where liquidations are minor. 6. There was no procedure between 2006 and 2014. Here is the summary (and I like to make tables!):

Type of procedures used on the territory Color
1 Savings+Reorganizations+Liquidations Dark Blue
2 Reorganizations+Liquidations Clear Blue
3 Reorganizations converted in liquidations+Liquidations Pink
4 Liquidations Red
5 Savings or Reorganizations > Liquidations Yellow
6 No procedures White

And now, you say to yourself: ‘Nice! But where those 6 categories are located?’ So…

It is interesting, no? I agree, it seems like the Eastern Bloc versus the Western Bloc, but this opposition is present in the Lyon’s mentality… and objectively, it exists. A high landscape and a rural character are associated with the Western part. The Eastern part is more urban and industrialized (and more flat!).

So, in the Western part, there is a concentration of territories in which there was only liquidations or liquidations and failed attempts of reorganization, some atypical communes (I live in one of it!) and some territories without procedure. Two types of territory dominate the Eastern part. The first is where the three procedures were used, and the second is where reorganization and liquidation were applied.

For the rest, it will be in my thesis ! (or maybe in a paper…)

 

Pour citer cet article : "The Geography of Bankruptcies and Social Inequalities" par Virginie BLUM. Publié sur _contre-Entreprendre|, le 04/09/2017. Lien : https://centreprendre.hypotheses.org/2930.

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