This paper investigates the relevance of financial and economic variables as determinants of firm default. Our analysis covers 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 to 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.

Bottazzi, G., Grazzi, M., Secchi, A., Tamagni, F., Financial and economic determinants of firm default, <<JOURNAL OF EVOLUTIONARY ECONOMICS>>, 2011; 21 (3): 373-406. [doi:10.1007/s00191-011-0224-6] [http://hdl.handle.net/10807/125982]

Financial and economic determinants of firm default

Grazzi, Marco;
2011

Abstract

This paper investigates the relevance of financial and economic variables as determinants of firm default. Our analysis covers 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 to 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.
2011
Inglese
Bottazzi, G., Grazzi, M., Secchi, A., Tamagni, F., Financial and economic determinants of firm default, <<JOURNAL OF EVOLUTIONARY ECONOMICS>>, 2011; 21 (3): 373-406. [doi:10.1007/s00191-011-0224-6] [http://hdl.handle.net/10807/125982]
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Utilizza questo identificativo per citare o creare un link a questo documento: https://hdl.handle.net/10807/125982
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