Ispravnikova, N. R., Mzhachikh, I. E. The Institution of Bankruptcy as a Part of the System of Determination and Defense of Property Rights Within the Framework of Market Economy

Abstract: Today the institution of bankruptcy is an essential attribute of market economy. From the point of view of the economic theory, the institute of bankruptcy is a part of the system of determinatin and defense of the property rights within the framework of market ecnomy. It regulates the system of industrial relations through establishing the procedure for disosing and creating the property rights for industrial facilities. Bankruptcy is some kind of an indicator of inefficient distribution of property rights. It shows inability of a particular owner to perform its economic function in the general system of economic relations. The process of elimination of such an inefficient owner and replacing it with a better and moer successful one is a part of the successive evolution of open market economy. Therefore, the institution of bankruptcy ensures marketability and economic growth of national economy and stabilizes economic relations. Morever, the institution of bankruptcy is some kind of a legal economic mechansim of a company’s reformatno and a mechanism of development of a more efficient distribution of property. Constant opportunity to get bankrupt is a powerful motivation for a more efficient work of all enterpreneurial structurs and substructures. It is the warranty for both creditors and a state institution as a market regulator.

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