IDEAS home Printed from https://ideas.repec.org/
MyIDEAS: Log in (now much improved!) to save this paper

The determinants of aggregate creditors' voluntary liquidations

Listed author(s):
  • Peter Lloyd Jones

    ()

    (Accounting Finance and Economics - Robert Gordon University)

Registered author(s):

    This paper investigates the determinants of creditors' voluntary liquidations (CVLs), an area of research that has received comparatively scant attention in the literature despite the fact that, at least in the UK, this form of insolvency has consistently comprised the majority of company failures. It develops an equilibrium correction model to explain variations in the aggregate number of creditors' voluntary liquidations in England and Wales between 1963 and 1995. This is then subjected to out-of-sample testing over the subsequent ten-year period. The results indicate that in both the short-run and the long-run, changes in the level of liquidations can be explained by two main explanatory variables namely: the nominal after-tax cost of borrowing and changes in real economic activity. In addition, confirmatory evidence is provided of the dampening effect of the 1986 Insolvency Act on the number of liquidations. The model retains its forecasting accuracy in the out-of-sample period although there is possibly some preliminary evidence of a further mitigating effect associated with the Enterprise Act 2002.

    If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.

    File URL: https://hal.archives-ouvertes.fr/hal-00762895/document
    Download Restriction: no

    Paper provided by HAL in its series Post-Print with number hal-00762895.

    as
    in new window

    Length:
    Date of creation: 09 Dec 2011
    Publication status: Published in Applied Economics, Taylor & Francis (Routledge), 2011, 45 (10), pp.1321-1330. <10.1080/00036846.2011.617695>
    Handle: RePEc:hal:journl:hal-00762895
    DOI: 10.1080/00036846.2011.617695
    Note: View the original document on HAL open archive server: https://hal.archives-ouvertes.fr/hal-00762895
    Contact details of provider: Web page: https://hal.archives-ouvertes.fr/

    References listed on IDEAS
    Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:

    as
    in new window


    1. Fabling, Richard & Grimes, Arthur, 2005. "Insolvency and economic development: Regional variation and adjustment," Journal of Economics and Business, Elsevier, vol. 57(4), pages 339-359.
    2. Dimitras, A. I. & Zanakis, S. H. & Zopounidis, C., 1996. "A survey of business failures with an emphasis on prediction methods and industrial applications," European Journal of Operational Research, Elsevier, vol. 90(3), pages 487-513, May.
    3. S. Balcaen & H. Ooghe, 2004. "35 years of studies on business failure: an overview of the classical statistical methodologiesand their related problems," Working Papers of Faculty of Economics and Business Administration, Ghent University, Belgium 04/248, Ghent University, Faculty of Economics and Business Administration.
    4. White, Halbert, 1980. "A Heteroskedasticity-Consistent Covariance Matrix Estimator and a Direct Test for Heteroskedasticity," Econometrica, Econometric Society, vol. 48(4), pages 817-838, May.
    5. Kearns, Allan, 2003. "Corporate Indebtedness and Liquidations in Ireland," Quarterly Bulletin Articles, Central Bank of Ireland, pages 91-105, August.
    6. Young, Garry, 1995. "Company Liquidations, Interest Rates and Debt," The Manchester School of Economic & Social Studies, University of Manchester, vol. 63(0), pages 57-69, Suppl..
    7. Jia Liu, 2004. "Macroeconomic determinants of corporate failures: evidence from the UK," Applied Economics, Taylor & Francis Journals, vol. 36(9), pages 939-945.
    Full references (including those not matched with items on IDEAS)

    This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

    When requesting a correction, please mention this item's handle: RePEc:hal:journl:hal-00762895. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (CCSD)

    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.

    If references are entirely missing, you can add them using this form.

    If the full references list an item that is present in RePEc, but the system did not link to it, you can help with 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 profile, as there may be some citations waiting for confirmation.

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

    This information is provided to you by IDEAS at the Research Division of the Federal Reserve Bank of St. Louis using RePEc data.