This analysis investigates how digital transformation influences bankruptcy filings in U.S. bankruptcy courts, suggesting significant behavioral implications.
Exploiting the staggered adoptions of electronic systems across 70 bankruptcy courts in the United States, I investigate the impacts of digital transformation on bankruptcy behavior. The digital transformation in bankruptcy courts significantly lowered the cost of filing by enabling debtors to file for bankruptcy online, yet empirical tests show significant drops in bankruptcy filings after the introduction of electronic filing. Heterogeneity analyses support the hypothesis that the information channel plays a key role: in addition to lowering costs, the digital transformation gave debtors access to an online database, thus increasing access to information about a broad range of bankruptcy case documents.
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Jie Yang (2026) studied this question.
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