An Error Component Logit Analysis of Corporate Bankruptcy and Insolvency Risk in Australia
AbstractThis paper introduces a four-state failure model to depict a wider range of distress scenarios that public companies typically face in the real world. We use a multinomial error component logit model to analyse firm failure, a major advance on the modelling techniques used in previous research. The error component logit model, being an extension of the more familiar mixed logit model, relaxes several questionable statistical assumptions associated with standard models. Using a sample of Australian firms we provide an interpretative illustration of the error component logit model and contrast its behavioural performance with the standard logit model widely used in previous research. Copyright © 2007 The Economic Society of Australia.
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Bibliographic InfoArticle provided by The Economic Society of Australia in its journal Economic Record.
Volume (Year): 83 (2007)
Issue (Month): 260 (03)
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- Alessandra Amendola & Marialuisa Restaino & Luca Sensini, 2013. "Corporate Financial Distress And Bankruptcy: A Comparative Analysis In France, Italy And Spain," Global Economic Observer, "Nicolae Titulescu" University of Bucharest, Faculty of Economic Sciences;Institute for World Economy of the Romanian Academy, vol. 1(2), pages 131-142, November.
- Ulf Liebe & Veronika A. Andorfer & Patricia A. Gwartney & Jürgen Meyerhoff, 2014. "Ethical Consumption and Social Context: Experimental Evidence from Germany and the United States," University of Bern Social Sciences Working Papers 7, University of Bern, Department of Social Sciences.
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0058, Rheinisch-Westfälisches Institut für Wirtschaftsforschung, Ruhr-Universität Bochum, Universität Dortmund, Universität Duisburg-Essen.
- Peter Grosche & Colin Vance, 2009. "Willingness to Pay for Energy Conservation and Free-Ridership on Subsidization: Evidence from Germany," The Energy Journal, International Association for Energy Economics, vol. 0(Number 2), pages 135-154.
- repec:ntu:ntugeo:vol1-iss2s-13-131 is not listed on IDEAS
- Martin Kukuk & Michael Rönnberg, 2013. "Corporate credit default models: a mixed logit approach," Review of Quantitative Finance and Accounting, Springer, vol. 40(3), pages 467-483, April.
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