Financial and Economic Determinants of Firm Default

Giulio Bottazzi, Marco Grazzi, Angelo Secchi and Federico Tamagni

Abstract: 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.

Keywords: firm (search for similar items in EconPapers)
Date: 2011
Note: View the original document on HAL open archive server: https://hal.science/hal-00642699v1
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Citations: View citations in EconPapers (30)

Published in Journal of Evolutionary Economics, 2011, pp.373

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Related works:
Journal Article: Financial and economic determinants of firm default (2011)
Working Paper: Financial and Economic Determinants of Firm Default (2011)
Working Paper: Financial and economic determinants of firm default (2009)
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