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Financial Distress Comparison Across Three Global Regions

Author

Listed:
  • Harlan D. Platt

    (Northeastern University, 360 Huntington Ave., Boston, MA 02115, USA)

  • Marjorie B. Platt

    (Northeastern University, 360 Huntington Ave., Boston, MA 02115, USA)

Abstract
Globalization has precipitated movement of output and employment between regions. We examine factors related to corporate financial distress across three continents. Using a multidimensional definition of financial distress we test three hypotheses to explain financial distress using historical financial data. A null hypothesis of a single global model was rejected in favor of a fully relaxed model which created individual financial distress models for each region. This result suggests that despite other indications of worldwide convergence, international differences in accounting rules, lending practices, managements skill levels, and legal requirements among others has kept corporate decline from becoming commoditized.

Suggested Citation

  • Harlan D. Platt & Marjorie B. Platt, 2008. "Financial Distress Comparison Across Three Global Regions," JRFM, MDPI, vol. 1(1), pages 1-34, December.
    • Handle: RePEc:gam:jjrfmx:v:1:y:2008:i:1:p:129-162:d:28326
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    References listed on IDEAS

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    Cited by:

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    3. Soo Young Kim, 2018. "Predicting hospitality financial distress with ensemble models: the case of US hotels, restaurants, and amusement and recreation," Service Business, Springer;Pan-Pacific Business Association, vol. 12(3), pages 483-503, September.
    4. Kun Jiang & Susheng Wang, 2024. "Survival tactics for distressed firms in emerging markets," Asia Pacific Journal of Management, Springer, vol. 41(2), pages 823-866, June.
    5. Mogilat , Anastasia & Ipatova, Irina, 2016. "Technical efficiency as a factor of Russian industrial companies’ risks of financial distress," Applied Econometrics, Russian Presidential Academy of National Economy and Public Administration (RANEPA), vol. 42, pages 05-29.
    6. Daitri Tiwary & Samit Paul, 2023. "Role of Bank Credit and External Commercial Borrowings in Working Capital Financing: Evidence from Indian Manufacturing Firms," JRFM, MDPI, vol. 16(11), pages 1-19, October.
    7. Guido Bonatti & Andrea Ciacci & Enrico Ivaldi, 2021. "Different Measures of Country Risk: An Application to European Countries," JRFM, MDPI, vol. 14(1), pages 1-16, January.
    8. David Alaminos & Manuel Ángel Fernández, 2019. "Why do football clubs fail financially? A financial distress prediction model for European professional football industry," PLOS ONE, Public Library of Science, vol. 14(12), pages 1-15, December.
    9. Proho Mahir, 2023. "Going concern assessment: a literature review," Journal of Forensic Accounting Profession, Sciendo, vol. 3(2), pages 48-62, December.
    10. Mário S. Céu & Raquel M. Gaspar, 2023. "Financial Distress in European Vineyards and Olive Groves," Working Papers REM 2023/0266, ISEG - Lisbon School of Economics and Management, REM, Universidade de Lisboa.
    11. David Alaminos & Agustín del Castillo & Manuel Ángel Fernández, 2016. "A Global Model for Bankruptcy Prediction," PLOS ONE, Public Library of Science, vol. 11(11), pages 1-18, November.
    12. Fernández-Gámez, Manuel Ángel & Soria, Juan Antonio Campos & Santos, José António C. & Alaminos, David, 2020. "European country heterogeneity in financial distress prediction: An empirical analysis with macroeconomic and regulatory factors," Economic Modelling, Elsevier, vol. 88(C), pages 398-407.

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