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Analysis of the Risk of Liquidation Depending on the Age of the Company: A Study of Entities Established in Szczecin in Period 1990-2010

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  • Markowicz Iwona

    (Univeristy of Szczecin, Szczecin, Poland)

Abstract

The aim of the research was an assessment of the relative risk of liquidation of a company depending on its age. The research covered economic entities established in Szczecin in the period 1990-2010. The analysis was carried out with the use of a logit model. The risk of company liquidation was examined depending on the entity’s age expressed both in months (continuous variable) and in grouped intervals (year, half-year). In this way, attention was drawn to the benefits of continuous variable coding (rank and 0-1 coding). The research covered companies established during 1990-2010 in total (over 120 thousand) and in time periods resulting from the cyclical character of liquidation of companies (in accordance with the earlier research findings). The research showed that the risk of company liquidation decreases as the company grows older (the use of a continuous variable and a rank variable). On the other hand, the risk of subsequent age groups (using the 0-1 variable) prevents the risk from being monotonous.

Suggested Citation

  • Markowicz Iwona, 2019. "Analysis of the Risk of Liquidation Depending on the Age of the Company: A Study of Entities Established in Szczecin in Period 1990-2010," Econometrics. Advances in Applied Data Analysis, Sciendo, vol. 23(2), pages 49-62, June.
    • Handle: RePEc:vrs:eaiada:v:23:y:2019:i:2:p:49-62:n:4
    DOI: 10.15611/eada.2019.2.04
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    References listed on IDEAS

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    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    survival analysis; firms’ duration; risk of liquidation;
    All these keywords.

    JEL classification:

    • C10 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods and Methodology: General - - - General
    • C14 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods and Methodology: General - - - Semiparametric and Nonparametric Methods: General
    • C41 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods: Special Topics - - - Duration Analysis; Optimal Timing Strategies

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