Financial and Economic Determinants of Firm Default
This paper investigates the relevance of financial and economic variables as determinants of firm default. Our analysis cover a large sample of medium-sized limited liability firms. Since default might lead, through bankruptcy or radical restructuring, to firm's exit, our work also relates with previous contributions on industrial demography. Using non parametric tests we assess to what extent defaulting firms differ from the non-defaulting group. Bootstrap probit regressions confirm that economic variables, in addition to standard financial indicators, play both a long and short term effect. Our findings are robust with respect to the inclusion of Distance to Default and risk ratings among the regressors.
|Date of creation:||2011|
|Date of revision:|
|Publication status:||Published, Journal of Evolutionary Economics, 2011, 373|
|Note:||View the original document on HAL open archive server: http://hal.archives-ouvertes.fr/hal-00642699|
|Contact details of provider:|| Web page: http://hal.archives-ouvertes.fr/|
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- Giulio Bottazzi & Angelo Secchi & Federico Tamagni, 2006.
"Productivity, Profitability and Financial Fragility: Evidence from Italian Business Firms,"
LEM Papers Series
2006/08, Laboratory of Economics and Management (LEM), Sant'Anna School of Advanced Studies, Pisa, Italy.
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