Corporate bankruptcy and survival on the market: Lessons from evolutionary economics

Abstract

The following paper is a theoretical and empirical study. The terminological differences between bankruptcy and insolvency have been indicated and compared in the article. Most frequently considered aspects of bankruptcy appear in definitions. The first of them emphasizes the economic character of bankruptcy. Insolvency is a culmination of a lack of financial means and the loss of solvency, which does not have a fading tendency, but develops into a permanent phenomenon. In legal terms, insolvency is an institution, whose purpose is to stop the accumulation of debts and most frequently it consists on the liquidation of the debtor's estate. The main purpose of the study is a critical review of the scientific achievements of the representatives of evolutionary economics within the scope and mechanism of bankruptcy and the survival of enterprises. The analyzed case of the Beta company, which went bankrupt, indicates that the companies which are not able to undertake proper adjustments to competitive conditions of the market at the right moment are eliminated from it. The theoretical law “the survival of the fittest” finds then its reflection in practice. The following research methods were used in the article: a descriptive analysis and the trajectories of J. Argenti in terms of models. Detailed examinations of files of insolvency proceedings of the Beta company have been carried out.