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The influence of the vulnerability of sectors on their survival and probability of insolvency: the case of small and medium entities in Spain || La influencia de la vulnerabilidad de los sectores en su supervivencia y probabilidad de insolvencia: el caso de las pequeñas y medianas entidades en España

Author

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  • Somoza, Antonio

    (Universidad de Barcelona)

Abstract

This paper looks at a sample of small and medium entities in Spain and analyzes the effect of the vulnerability of sectors to insolvency on their survival and the probability that they will go bankrupt. We collected data from solvent and insolvent firms in Spain over the period 2012-2016, and grouped them according to the percentage of insolvencies by sector (highest, lowest, and a reference group). The results show that no differences in the endurance of the firms emerge among the groups, while some variables appear to be relevant when the logit analysis is applied. Survival depends on liquidity and size in all industries, but profitability and turnover are also essential for the group with the highest levels of insolvency. The probability of bankruptcy is mainly explained by turnover and short-term solvency. Size and turnover have negative effects on bankruptcy. Age is also a common factor, but with a different interpretation for each technique. The main contribution of this paper is the analysis of insolvency in the two dimensions of survival and probability according to the sectorial insolvency rate.|| Este artículo analiza la vulnerabilidad sectorial a la insolvencia basándose en el análisis de supervivencia y la probabilidad de la misma en una muestra de pequeñas y medianas empresas en España. Se han recogido datos de empresas solventes e insolventes para el período 2012-2016 y han sido agrupadas por el porcentaje de insolvencias por sectores (alto, bajo y un grupo de referencia). Los resultados muestran que no hay diferencias en la duración de las empresas entre los grupos y algunas variables parecen ser relevantes cuando se aplica el análisis logístico. La supervivencia depende de la liquidez y el tamaño en todos los sectores, pero la rentabilidad y la rotación son también esenciales para el grupo con más altos niveles de insolvencia. La probabilidad de quiebra se explica principalmente por la rotación y la solvencia a corto plazo. El tamaño y la rotación tiene efectos negativos sobre la quiebra. La edad del negocio es también un factor común, pero con diferentes interpretaciones para cada técnica. La principal contribución del artículo reside en el análisis de la insolvencia en dos dimensiones: supervivencia y probabilidad de acuerdo con la tasa de insolvencia sectorial.

Suggested Citation

  • Somoza, Antonio, 2021. "The influence of the vulnerability of sectors on their survival and probability of insolvency: the case of small and medium entities in Spain || La influencia de la vulnerabilidad de los sectores en s," Revista de Métodos Cuantitativos para la Economía y la Empresa = Journal of Quantitative Methods for Economics and Business Administration, Universidad Pablo de Olavide, Department of Quantitative Methods for Economics and Business Administration, vol. 32(1), pages 148-174, December.
    • Handle: RePEc:pab:rmcpee:v:32:y:2021:i:1:p:148-174
    DOI: https://doi.org/10.46661/revmetodoscuanteconempresa.4339
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    More about this item

    Keywords

    insolvency; bankrutpcy; survival; logit; Spain; insolvencia; quiebra; supervivencia; logit; España;
    All these keywords.

    JEL classification:

    • G33 - Financial Economics - - Corporate Finance and Governance - - - Bankruptcy; Liquidation
    • M41 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Accounting - - - Accounting
    • M21 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Economics - - - Business Economics

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