IDEAS home Printed from https://ideas.repec.org/a/bla/manch2/v64y1996i3p298-308.html
   My bibliography  Save this article

The Determinants of Compulsory Liquidation in the U.K

Author

Listed:
  • Cuthbertson, Keith
  • Hudson, John

Abstract

Compulsory liquidations in the United Kingdom are found to depend on profit margins, the age distribution of new firms and the change in income gearing. The results are consistent with a model where the probability of insolvency increases with a squeeze on real profits which may be caused by higher real unit labour costs or rises in real material's input costs. An increase in income gearing on outstanding debt increases the probability that creditors will institute insolvency proceedings and 'bad luck' is found to be a cause of some liquidations of newly established firms. The empirical results imply that government macroeconomic policy can have a strong influence on liquidations via changes in income gearing and changes in profitability over the economic cycle. Copyright 1996 by Blackwell Publishers Ltd and The Victoria University of Manchester

Suggested Citation

  • Cuthbertson, Keith & Hudson, John, 1996. "The Determinants of Compulsory Liquidation in the U.K," The Manchester School of Economic & Social Studies, University of Manchester, vol. 64(3), pages 298-308, September.
    • Handle: RePEc:bla:manch2:v:64:y:1996:i:3:p:298-308
    as

    Download full text from publisher

    To our knowledge, this item is not available for download. To find whether it is available, there are three options:
    1. Check below whether another version of this item is available online.
    2. Check on the provider's web page whether it is in fact available.
    3. Perform a search for a similarly titled item that would be available.

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Hunter, John & Isachenkova, Natalia, 2006. "Aggregate economy risk and company failure: An examination of UK quoted firms in the early 1990s," Journal of Policy Modeling, Elsevier, vol. 28(8), pages 911-919, November.
    2. Bhattacharjee, Arnab & Hany, Jie, 2010. "Financial Distress in Chinese Industry: Microeconomic, Macroeconomic and Institutional Infuences," SIRE Discussion Papers 2010-53, Scottish Institute for Research in Economics (SIRE).
    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.
    4. Stefan Szymanski, 2017. "Entry into exit: insolvency in English professional football," Scottish Journal of Political Economy, Scottish Economic Society, vol. 64(4), pages 419-444, September.
    5. 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.
    6. Ran Sharabany, 2004. "Business Failures and Macroeconomic Risk Factors," Bank of Israel Working Papers 2004.06, Bank of Israel.
    7. 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.
    8. Gertjan W. Vlieghe, 2001. "Indicators of fragility in the UK corporate sector," Bank of England working papers 146, Bank of England.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:bla:manch2:v:64:y:1996:i:3:p:298-308. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Wiley Content Delivery (email available below). General contact details of provider: https://edirc.repec.org/data/semanuk.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.