Macro Economic Instability and Business Exit: Determinants of Failures and Acquisitions of Large UK Firms
AbstractUsing data over a 34-year span on UK quoted firms, this paper seeks to identify the factors that increase the likelihood of exit of firms. Firms may disappear through the mutually precluding events of bankruptcies and acquisitions. We use a competing-risks hazard model to determine characteristics leading to each outcome. Hazard models make use of the data on timing of these alternative outcomes and we exploit this to focus attention on how the hazards change over the business cycles, conditional on the post-listing age of the firm. We find that the volatility in macro environment has a role in determining, in different ways, the hazard of firms going bankrupt or being acquired.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. 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.
Bibliographic InfoPaper provided by Royal Economic Society in its series Royal Economic Society Annual Conference 2002 with number 27.
Date of creation: 29 Aug 2002
Date of revision:
Contact details of provider:
Postal: Office of the Secretary-General, School of Economics and Finance, University of St. Andrews, St. Andrews, Fife, KY16 9AL, UK
Phone: +44 1334 462479
Web page: http://www.res.org.uk/society/annualconf.asp
More information through EDIRC
Other versions of this item:
- A. Bhattacharjee & Higson, C. & Holly, S. & Kattuman, P., 2002. "Macro Economic Instability and Business Exit: Determinants of Failures and Acquisitions of Large UK Firms," Cambridge Working Papers in Economics 0206, Faculty of Economics, University of Cambridge.
- E32 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Business Fluctuations; Cycles
- D21 - Microeconomics - - Production and Organizations - - - Firm Behavior: Theory
- C41 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods: Special Topics - - - Duration Analysis; Optimal Timing Strategies
- L16 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Industrial Organization and Macroeconomics; Macroeconomic Industrial Structure
This paper has been announced in the following NEP Reports:
- NEP-ALL-2002-07-08 (All new papers)
You can help add them by filling out this form.
CitEc Project, subscribe to its RSS feed for this item.
- Arnab Bhattacharjee, 2005.
"Models of Firm Dynamics and the Hazard Rate of Exits: Reconciling Theory and Evidence using Hazard Regression Models,"
CRIEFF Discussion Papers
0502, Centre for Research into Industry, Enterprise, Finance and the Firm.
- Arnab Bhattacharjee, 2005. "Models of Firm Dynamics and the Hazard Rate of Exits: Reconciling Theory and Evidence using Hazard Regression Models," Econometrics 0503021, EconWPA.
- Diana Bonfim, 2006.
"Credit Risk Drivers: Evaluating the Contribution of Firm Level Information and of Macroeconomic Dynamics,"
Economic Bulletin and Financial Stability Report Articles,
Banco de Portugal, Economics and Research Department.
- Bonfim, Diana, 2009. "Credit risk drivers: Evaluating the contribution of firm level information and of macroeconomic dynamics," Journal of Banking & Finance, Elsevier, vol. 33(2), pages 281-299, February.
- Diana Bonfim, 2007. "Credit Risk Drivers: Evaluating the Contribution of Firm Level Information and of Macroeconomic Dynamics," Working Papers w200707, Banco de Portugal, Economics and Research Department.
- Arnab Bhattacharjee & Madhuchhanda Bhattacharjee, 2007.
"Bayesian Analysis of Hazard Regression Models under Order Restrictions on Covariate Effects and Ageing,"
Discussion Paper Series, Department of Economics
200707, Department of Economics, University of St. Andrews.
- Bhattacharjee, Arnab & Bhattacharjee, Madhuchhanda, 2007. "Bayesian Analysis of Hazard Regression Models under Order Restrictions on Covariate Effects and Ageing," MPRA Paper 3938, University Library of Munich, Germany.
- Bhattacharjee, Arnab, 2004.
"A Simple Test for the Absence of Covariate Dependence in Hazard Regression Models,"
3937, University Library of Munich, Germany.
- Arnab Bhattacharjee, 2007. "A Simple Test for the Absence of Covariate Dependence in Hazard Regression Models," Discussion Paper Series, Department of Economics 200708, Department of Economics, University of St. Andrews.
- David Greenaway, & Joakim Gullstrand, & Richard Kneller, .
"Live or Let Die? Alternative Routes to Industry Exit,"
07/10, University of Nottingham, GEP.
- David Greenaway & Joakim Gullstrand & Richard Kneller, 2009. "Live or Let Die? Alternative Routes to Industry Exit," Open Economies Review, Springer, vol. 20(3), pages 317-337, July.
- J. David Brown & Julie L. Hotchkiss & Myriam Quispe-Agnoli, 2013.
"Does Employing Undocumented Workers Give Firms A Competitive Advantage?,"
Journal of Regional Science,
Wiley Blackwell, vol. 53(1), pages 158-170, 02.
- J. David Brown & Julie L. Hotchkiss & Myriam Quispe-Agnoli, 2012. "Does employing undocumented workers give firms a competitive advantage?," Working Paper 2012-02, Federal Reserve Bank of Atlanta.
- 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 200713, Centre for Dynamic Macroeconomic Analysis.
- Faiçal Belaid, 2014. "Loan quality determinants: evaluating the contribution of bank-specific variables, macroeconomic factors and firm level information," IHEID Working Papers 04-2014, Economics Section, The Graduate Institute of International Studies.
- Arnab Bhattacharjee & Chris Higson & Sean Holly, 2014. "Asymmetric Price Adjustment, Sticky Costs and Operating Leverage over the Business Cycle," SEEC Discussion Papers 1402, Spatial Economics and Econometrics Centre, Heriot Watt University.
- 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.
- Marcus Box, 2008. "The death of firms: exploring the effects of environment and birth cohort on firm survival in Sweden," Small Business Economics, Springer, vol. 31(4), pages 379-393, December.
- Philip Bunn & Victoria Redwood, 2003. "Company accounts based modelling of business failures and the implications for financial stability," Bank of England working papers 210, Bank of England.
- repec:diw:diwfin:diwfin01050 is not listed on IDEAS
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Christopher F. Baum).
If references are entirely missing, you can add them using this form.