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On the Geographic and Cultural Determinants of Bankruptcy

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  • Stefan BUEHLER
  • Christian KAISER
  • Franz JAEGER

Abstract

This paper examines the role of geography and culture in explaining bankruptcy. We adopt survival analyses to model the bankruptcy risk of a firm, allowing for time-varying covariates. Based on a large sample from all major sectors of the Swiss economy, we find the following results: (i) The geographic location of a firm, which is characterized using a core-periphery approach, has a significant impact on its bankruptcy risk; (ii) Variables proxying for the cultural environment of a firm have significant explanatory power; (iii) The results of the previous literature on the standard determinants of bankruptcy are confirmed.
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Suggested Citation

  • Stefan BUEHLER & Christian KAISER & Franz JAEGER, 2010. "On the Geographic and Cultural Determinants of Bankruptcy," Regional and Urban Modeling 284100011, EcoMod.
    • Handle: RePEc:ekd:002841:284100011
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    References listed on IDEAS

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    2. Donja Darai & Dario Sacco & Armin Schmutzler, 2010. "Competition and innovation: an experimental investigation," Experimental Economics, Springer;Economic Science Association, vol. 13(4), pages 439-460, December.
    3. Dennis L. Gärtner, 2010. "Monopolistic screening under learning by doing," RAND Journal of Economics, RAND Corporation, vol. 41(3), pages 574-597, September.
    4. Johannes Schoder & Peter Zweifel, 2008. "Managed Care Konzepte und L�sungsans�tze� Ein internationaler Vergleich aus schweizerischer Sicht," SOI - Working Papers 0801, Socioeconomic Institute - University of Zurich.
    5. Falkinger, Josef, 2008. "Between Agora and Shopping Mall," IZA Discussion Papers 3524, Institute of Labor Economics (IZA).
    6. Dennis Gaertner, 2007. "Why Bayes Rules: A Note on Bayesian vs. Classical Inference in Regime Switching Models," SOI - Working Papers 0719, Socioeconomic Institute - University of Zurich.
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    8. Adrian Bruhin, 2008. "Stochastic Expected Utility and Prospect Theory in a Horse Race: A Finite Mixture Approach," SOI - Working Papers 0803, Socioeconomic Institute - University of Zurich.
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    JEL classification:

    • C41 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods: Special Topics - - - Duration Analysis; Optimal Timing Strategies
    • R10 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - General
    • Z10 - Other Special Topics - - Cultural Economics - - - General

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