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Technical efficiency as a factor of Russian industrial companies’ risks of financial distress

Author

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  • Mogilat , Anastasia

    (Central Bank of the Russian Federation, Moscow, Russian Federation)

  • Ipatova, Irina

    (National Research University Higher School of Economics; The Center for Macroeconomic Analysis and Short-term Forecasting, Moscow, Russian Federation)

Abstract

The paper proposes a two-step methodology of investigation the impact of technical efficiency (estimated by stochastic frontier model) on Russian industrial companies’ risks of financial distress (estimated by bankruptcy prediction model — see King, Zeng, 2001). We show that growth of technical efficiency has robust, significant and large impact on the expected probability of financial distress. We also extend the «benchmark» specification of bankruptcy prediction model by including dummy variables for structural breaks in bankruptcy dynamics associated with significant changes in Bankruptcy law.

Suggested Citation

  • Mogilat , Anastasia & Ipatova, Irina, 2016. "Technical efficiency as a factor of Russian industrial companies’ risks of financial distress," Applied Econometrics, Russian Presidential Academy of National Economy and Public Administration (RANEPA), vol. 42, pages 05-29.
  • Handle: RePEc:ris:apltrx:0289
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    References listed on IDEAS

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    Cited by:

    1. Karminsky, A. & Rybalka, A., 2018. "Negative Net Worth of Manufacturing Companies: Corporate Governance and Industry Expectations," Journal of the New Economic Association, New Economic Association, vol. 38(2), pages 76-103.
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    More about this item

    Keywords

    technical efficiency; bankruptcy prediction model; Russian industrial companies; SFA; logit analysis.;
    All these keywords.

    JEL classification:

    • C25 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Discrete Regression and Qualitative Choice Models; Discrete Regressors; Proportions; Probabilities
    • C43 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods: Special Topics - - - Index Numbers and Aggregation
    • D24 - Microeconomics - - Production and Organizations - - - Production; Cost; Capital; Capital, Total Factor, and Multifactor Productivity; Capacity
    • G32 - Financial Economics - - Corporate Finance and Governance - - - Financing Policy; Financial Risk and Risk Management; Capital and Ownership Structure; Value of Firms; Goodwill
    • G33 - Financial Economics - - Corporate Finance and Governance - - - Bankruptcy; Liquidation

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