This file is part of IDEAS, which uses RePEc data


[ Papers | Articles | Software | Books | Chapters | Authors | Institutions | JEL Classification | NEP reports | Search | New papers by email | Author registration | Rankings | Volunteers | FAQ | Blog | Help! ]

Macroeconomic determinants of corporate failures: evidence from the UK

Author info | Abstract | Publisher info | Download info | Related research | Statistics
Author Info
Jia Liu
Abstract

Previous studies on the relationship between macroeconomic aggregates and business failures have been restricted to the description of the short-run relationships among the variables. This paper uses an error-correction model (ECM) to investigate the determinants of UK corporate failures by modelling the short-run and long-run behaviours of corporate failure rates in relation to macroeconomic phenomena over the period 1966-1999. The findings indicate that failure rates are associated with interest rates, credit, profits, price, and corporate birth rates both in the short run and in the long run. Of these macroeconomic variables, interest rate appears to be an important factor influencing failure rates and can be used as a feasible policy instrument to reduce the incidence of corporate failures. The impact of the Insolvency Act 1986 has also been examined and its mitigating effect on corporate failures has been identified.

Download Info
To download:

If you experience problems downloading a file, check if you have the proper application to view it first. Information about this may be contained in the File-Format links below. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.

File URL: http://taylorandfrancis.metapress.com/link.asp?target=contribution&id=PJ02P2L6WTWJWD2V
File Format: text/html
File Function:
Download Restriction: Access to full text is restricted to subscribers.

As the access to this document is restricted, you may want to look for a different version under "Related research" (further below) or search for a different version of it.

Publisher Info
Article provided by Taylor and Francis Journals in its journal Applied Economics.

Volume (Year): 36 (2004)
Issue (Month): 9 (May)
Pages: 939-945
Download reference. The following formats are available: HTML (with abstract), plain text (with abstract), BibTeX, RIS (EndNote, RefMan, ProCite), ReDIF
Handle: RePEc:taf:applec:v:36:y:2004:i:9:p:939-945

Contact details of provider:
Web page: http://www.tandf.co.uk/journals/routledge/00036846.html

Order Information:
Web: http://www.tandf.co.uk/journals/subscription.html

For technical questions regarding this item, or to correct its listing, contact: (Christopher F. Baum).

Related research
Keywords:

References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:

  1. Stephen D. Oliner & Glenn D. Rudebusch, 1994. "Is there a broad credit channel for monetary policy?," Working Paper Series / Economic Activity Section 146, Board of Governors of the Federal Reserve System (U.S.).
    Other versions:
  2. Turner, Paul & Coutts, Andrew & Bowden, Sue, 1992. "The Effect of the Thatcher Government on Company Liquidations: An Econometric Study," Applied Economics, Taylor and Francis Journals, vol. 24(8), pages 935-43, August.
  3. Engle, Robert F & Granger, Clive W J, 1987. "Co-integration and Error Correction: Representation, Estimation, and Testing," Econometrica, Econometric Society, vol. 55(2), pages 251-76, March. [Downloadable!] (restricted)
  4. Platt, Harlan D. & Platt, Marjorie B., 1994. "Business cycle effects on state corporate failure rates," Journal of Economics and Business, Elsevier, vol. 46(2), pages 113-127, May. [Downloadable!] (restricted)
Full references

Cited by:
(explanations, Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.)

  1. Arnab Bhattacharjee & Chris Higson & Sean Holly & Paul Kattuman, 2007. " Macroeconomic Conditions and Business Exit: Determinants of Failures and Acquisitions of UK Firms," CDMA Working Paper Series 0713, Centre for Dynamic Macroeconomic Analysis. [Downloadable!]
  2. Christopher F. Baum & Mustafa Caglayan & Andreas Stephan & Oleksandr Talavera, 2005. "Uncertainty Determinants of Corporate Liquidity," Boston College Working Papers in Economics 634, Boston College Department of Economics, revised 09 Oct 2006. [Downloadable!]
    Other versions:
  3. Nico Dewaelheyns & Cynthia Hulle, 2008. "Legal reform and aggregate small and micro business bankruptcy rates: evidence from the 1997 Belgian bankruptcy code," Small Business Economics, Springer, vol. 31(4), pages 409-424, December. [Downloadable!] (restricted)
  4. Salman, A. Khalik & von Friedrichs, Yvonne & Shukur, Ghazi, 2009. "Macroeconomic Factors and Swedish Small and Medium-Sized Manufacturing Firm Failure," Working Paper Series in Economics and Institutions of Innovation 185, Royal Institute of Technology, CESIS - Centre of Excellence for Science and Innovation Studies. [Downloadable!]
  5. Agustinus, Prasetyantoko & Rachmadi, Parmono, 2008. "Determinants of Corporate Performance of Listed Companies in Indonesia," MPRA Paper 6777, University Library of Munich, Germany. [Downloadable!]
Statistics
Access and download statistics

Did you know? All RePEc services are meant to be be free forever, as they are all run by volunteers.

This page was last updated on 2009-12-5.

This information is provided to you by IDEAS at the Department of Economics, College of Liberal Arts and Sciences, University of Connecticut using RePEc data on a server sponsored by the Society for Economic Dynamics.