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Bankruptcy Risk and Productive Efficiency in Manufacturing Firms

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Author Info
Leonardo Becchetti () (University of Rome II - Faculty of Economics)
Jaime Humberto Sierra Gonzalez 2 () (Pontifical University Javeriana Inicio - Department of Economics)

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Abstract

The paper investigates the determinants of bankruptcy in three representative unbalanced samples of Italian firms for the periods 1989-1991, 1992-94 and 1995-97. Two important results are that: i) the degree of relative firm inefficiency measured as the distance from the efficient frontier has significant explanatory power in predicting bankruptcy ii) qualitative regressors such as customers' concentration and strength and proximity of competitors have significant predictive power and suggest that banks should not restrict their monitoring activity to balance sheet variables. These findings remain significant after controlling for balance sheet liquidity and profitability variables usually considered in these estimates

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File URL: ftp://www.ceistorvergata.it/repec/rpaper/No-30-Becchetti,Jaime.pdf
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Publisher Info
Paper provided by Tor Vergata University, CEIS in its series CEIS Research Paper with number 30.

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Length: 32
Date of creation: 11 Aug 2003
Date of revision:
Handle: RePEc:rtv:ceisrp:30

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Postal: CEIS - Centre for Economic and International Studies - Faculty of Economics - University of Rome "Tor Vergata" - Via Columbia, 2 00133 Roma
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Related research
Keywords: bankruptcy prediction; stochastic frontiers; qualitative indicators;

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Find related papers by JEL classification:
G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Mortgages
D21 - Microeconomics - - Production and Organizations - - - Firm Behavior

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.:

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    Other versions:
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    Other versions:
  6. Stiglitz, Joseph E & Weiss, Andrew, 1992. "Asymmetric Information in Credit Markets and Its Implications for Macro-economics," Oxford Economic Papers, Oxford University Press, vol. 44(4), pages 694-724, October. [Downloadable!] (restricted)
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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. Leonardo Becchetti & Melody Garcia & Giovanni Trovato, 2009. "Credit rationing and credit view: empirical evidence from loan data," CEIS Research Paper 144, Tor Vergata University, CEIS, revised 30 Sep 2009. [Downloadable!]
  2. Koetter, Michael & Bos, Jaap W. B. & Heid, Frank & Kool, Clemens J. M. & Kolari, James W. & Porath, Daniel, 2005. "Accounting for distress in bank mergers," Discussion Paper Series 2: Banking and Financial Studies 2005,09, Deutsche Bundesbank, Research Centre. [Downloadable!]
    Other versions:
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