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Corporate Failure

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  • Ben Jabeour Sami

Abstract

A number of authors suggested that the impact of the macroeconomic factors on the incidence of the financial distress, and afterward in case of failure of companies. However, macroeconomic factors rarely, if ever, appear as variables in predictive models that seek to identify distress and failure; modellers generally suggest that the impact of macroeconomic factors has already been taken into account by financial ratio variables. This article presents a systematic study of this domain, by examining the link between the failure of companies and macroeconomic factors for the French companies to identify the most important variables and to estimate their utility in a predictive context. The results of the study suggest that several macroeconomic variables are strictly associated to the failure, and have a predictive value by specifying the relation between the financial distress and the failure.

Suggested Citation

  • Ben Jabeour Sami, 2013. "Corporate Failure," International Journal of Finance & Banking Studies, Center for the Strategic Studies in Business and Finance, vol. 2(3), pages 103-110, July.
    • Handle: RePEc:rbs:ijfbss:v:2:y:2013:i:3:id:424
    DOI: 10.20525/ijfbs.v2i3.157
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    References listed on IDEAS

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