Frederick M. Richardson (Department of Accounting, Virginia Polytechnic Institute and State University, Blacksburg, Viginia, USA,) Gregory D. Kane Patricia Lobingier
Abstract
In this paper, we hypothesize that recessionary business cycles can contribute to corporate failure. Specifically, we test for a relationship between failure and (1) knowledge that failure occurred during a recession and (2) knowledge that the predictor variables were measured during a recession. We are able to show that accounting-based logistic regression models used to predict corporate failure are sensitive to the occurrence of a recession. Furthermore, our results indicate that such models are sensitive to knowledge that the predictor variables were generated during a recession and to knowledge that failure ultimately occurred during a recession. Copyright Blackwell Publishers Ltd 1998.
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Volume (Year): 25 (1998-01) Issue (Month): 1&2 () Pages: 167-186 Download reference. The following formats are available: HTML
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