Moving in and out of financial distress: evidence for newly founded service sector firms
The determinants of transitions between different states of financial distress are analyzed using two versions of Markov chain models: a multinomial logit model without random effects and a multinomial logit model capturing such unobservable factors. The empirical analysis is based on a panel data set containing information on 15,538 East German firms founded between 1994 and 1999. The estimation results indicate that the effect of limited liability depends upon firms' starting state, the existence of corporate shareholders improves firms' financial performance, multiple credit relationships have negative effects and product diversification as well as positive macroeconomic conditions improve firms' financial performance.
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- Kaiser, Ulrich & Kreuter, Markus & Niggemann, Hiltrud, 2000. "The ZEW - Creditreform business survey in the business-related services sector : sampling frame, stratification, expansion and results," ZEW Discussion Papers 00-22, ZEW - Zentrum für Europäische Wirtschaftsforschung / Center for European Economic Research.
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- Kaiser, Ulrich & Voß, Katrin, 1999. "Do business-related services really lag behind manufacturing industries in the business cycle?," ZEW Discussion Papers 99-34, ZEW - Zentrum für Europäische Wirtschaftsforschung / Center for European Economic Research.
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17, American Institute for Contemporary German Studies-.
- Elston, Julie Ann, 1996. "Investment, Liquidity Constraints and Bank Relationships: Evidence from German Manufacturing Firms," CEPR Discussion Papers 1329, C.E.P.R. Discussion Papers.
- Susanne Prantl, 2000. "Post-Entry Selection Among Newly Founded Firms in East and West Germany after Unification: A Competing Risk Model with Forced Bankruptcy Liquidations and Voluntary Liquidations," Econometric Society World Congress 2000 Contributed Papers 1602, Econometric Society.
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