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A long-run survival analysis of corporate liquidations in Ireland

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  • Robert Kelly
  • Eoin Brien
  • Rebecca Stuart

Abstract

This paper examines the role of credit and the macroeconomy in small and medium enterprise (SME) distress during a prolonged economic downturn. Specifically, we estimate the determinants of SME distress in Ireland during the severe financial and economic crisis which began in 2007/2008. We use a measure of distress, insolvencies, which captures both bank and non-bank forms of credit. We conduct a survival analysis of insolvent liquidations and find that, controlling for firm location and economic activity, both variables capturing a build-up of stress in the macroeconomy and those capturing bank credit standards and availability throughout the cycle are determinants of firm survival. Copyright Springer Science+Business Media New York 2015

Suggested Citation

  • Robert Kelly & Eoin Brien & Rebecca Stuart, 2015. "A long-run survival analysis of corporate liquidations in Ireland," Small Business Economics, Springer, vol. 44(3), pages 671-683, March.
    • Handle: RePEc:kap:sbusec:v:44:y:2015:i:3:p:671-683
    DOI: 10.1007/s11187-014-9605-1
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    12. Sudheer Chava & Robert A. Jarrow, 2008. "Bankruptcy Prediction with Industry Effects," World Scientific Book Chapters, in: Financial Derivatives Pricing Selected Works of Robert Jarrow, chapter 21, pages 517-549, World Scientific Publishing Co. Pte. Ltd..
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    Cited by:

    1. Sun, Ruohan & Zhou, Nan & Zhang, Bing, 2023. "Can bank branch establishment help SMEs survive? Evidence from China," International Review of Financial Analysis, Elsevier, vol. 88(C).
    2. McInerney, Niall, 2019. "Macroprudential Policy, Banking and the Real Estate Sector," MPRA Paper 91777, University Library of Munich, Germany.
    3. Ichiro Iwasaki & Evžen Kočenda & Yoshisada Shida, 2022. "Institutions, financial development, and small business survival: evidence from European emerging markets," Small Business Economics, Springer, vol. 58(3), pages 1261-1283, March.
    4. Slaymaker, Rachel & O'Toole, Conor & McQuinn, Kieran & Fahy, Mike, 2018. "Monetary policy normalisation and mortgage arrears in a recovering economy: The case of the Irish residential market," Papers WP613, Economic and Social Research Institute (ESRI).
    5. Jaka Cepec & Peter Grajzl & Barbara Mörec, 2022. "Public cash and modes of firm exit," Journal of Evolutionary Economics, Springer, vol. 32(1), pages 247-298, January.
    6. Guimarães Barbosa, Evaldo, 2016. "The relationships between, on the hand, size, growth and age of the firm and, on the other hand, small business survival – a constructive critique and a proposal of a new framework," MPRA Paper 72111, University Library of Munich, Germany.
    7. O’Toole, Conor & Slaymaker, Rachel, 2021. "Repayment capacity, debt service ratios and mortgage default: An exploration in crisis and non-crisis periods," Journal of Banking & Finance, Elsevier, vol. 133(C).
    8. Bergin, Adele & Conroy, Niall & Garcia Rodriguez, Abian & Holland, Dawn & McInerney, Niall & Morgenroth, Edgar & Smith, Donal, 2017. "COSMO: A new COre Structural MOdel for Ireland," Papers WP553, Economic and Social Research Institute (ESRI).
    9. Zhou, Nan & Sun, Ruohan, 2024. "Coping with the storm: The role of fintech in SME survival," International Review of Financial Analysis, Elsevier, vol. 93(C).

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    More about this item

    Keywords

    Ireland; Corporate liquidations; Firm default; Survival analysis; C25; D20; L0; L26;
    All these keywords.

    JEL classification:

    • C25 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Discrete Regression and Qualitative Choice Models; Discrete Regressors; Proportions; Probabilities
    • D20 - Microeconomics - - Production and Organizations - - - General
    • L0 - Industrial Organization - - General

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