The move follows a report by the World Bank, which found that the cost of closing a business was higher in the UK than other countries with similar or better recovery rates.
Clive Maxwell, OFT Senior Director of Services, said: 'We want to identify any potential problems within the corporate insolvency market to ensure that firms and practitioners are competing freely and that the market is working well for the end consumers.
"Efficient insolvency services are an important component of a modern market economy."
Many creditors in the print industry have been angered over reports that administrators for printing companies have charged thousands of pounds for work that often results in a controversial pre-pack of the business.
However, R3, the trade body for insolvency practitioners said it welcomed the OFT corporate insolvency study, saying it "hopes that unfounded claims about insolvency practitioners' fees can be put to bed for once and for all".
It claimed that the study would demonstrate the value the industry brings when dealing with companies in administration.
According to the industry body, insolvency practitioners do not get paid in all circumstances and they work in one of the most heavily regulated industries in the UK.
"We welcome this chance to prove our worth and we are proud of what we do in terms of rescuing businesses and saving jobs," said R3 vice-president Steven Law.
The Forum of Private Business, has said the investigation should also investigate phoenix companies and directors who abuse the process.
"When a business drops out of the market, banks and the government take their cut, but what about the small business which has supplied that company and has never been paid?" asked Matt Goodman, the FPB’s policy representative.
"Or, if a competitor wipes the slate clean of debts and carries on trading – where does that leave those small businesses struggling with their own finances?"
Coinciding with the OFT’s investigation, an Early Day Motion, which calls on the government to carry out a review of the UK’s insolvency laws in order to protect unsecured creditors, has now been signed by more than 30 MPs.
