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The waves of enterprises bankruptcy and the factors that determine them: the case of Latvia and Lithuania

Author

Listed:
  • Jonas Mackevičius

    (Vilnius University, Lithuania)

  • Ruta Šneidere

    (University of Latvia, Latvia)

  • Daiva Tamulevičienė

    (Vilnius University, Lithuania)

Abstract

Bankruptcy of enterprises is macroeconomic issue and a phenomenon of a dynamic and competitive market economy. It results in a lot of negative effects not only for the enterprise and its employees but also for other enterprises and institutions, as well as the state and society. The aim of the article is to carry out the analysis of bankruptcy of Latvian and Lithuanian enterprises. No such study has been carried out so far. Article analyses the dynamics of Latvian and Lithuanian enterprise bankruptcy, which manifest themselves in larger waves in certain periods and the factors that influence them. From 1993 – when the bankruptcy of enterprises was started to be officially registered – to 1 January 2017, 21,503 Latvian enterprises and 20,933 Lithuanian enterprises went bankrupt. The largest wave of bankruptcy took place in the period of 2008-2010, when the financial crisis started in both countries. The comparative analysis of Latvian and Lithuanian enterprise bankruptcies was carried out according to the economic activity types and enterprises legal forms. In both countries mostly wholesale and retail trade, repair of motor vehicles and motorcycles enterprises (30% on average) go bankrupt, while construction enterprises (13% on average) are the runners-up. Initiators of enterprise bankruptcy are studied, numbers of Latvian and Lithuanian enterprises that went bankrupt are compared to the overall number of companies in the country. The data of this analysis are valuable when forecasting enterprise bankruptcy and preparing the measures to avoid it. The main research methods: analysis of scientific literature and statistical data, case analysis, methods of collection, grouping, comparison and generalization of information.

Suggested Citation

  • Jonas Mackevičius & Ruta Šneidere & Daiva Tamulevičienė, 2018. "The waves of enterprises bankruptcy and the factors that determine them: the case of Latvia and Lithuania," Entrepreneurship and Sustainability Issues, VsI Entrepreneurship and Sustainability Center, vol. 6(1), pages 100-114, September.
    • Handle: RePEc:ssi:jouesi:v:6:y:2018:i:1:p:100-114
    DOI: 10.9770/jesi.2018.6.1(8)
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    References listed on IDEAS

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    1. Irina Genriha & Gaida Pettere & Irina Voronova, 2011. "Entrepreneurship insolvency risk management: a case of Latvia," International Journal of Banking, Accounting and Finance, Inderscience Enterprises Ltd, vol. 3(1), pages 31-46.
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    Citations

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    Cited by:

    1. Jerzy Kitowski & Anna Kowal-Pawul & Wojciech Lichota, 2022. "Identifying Symptoms of Bankruptcy Risk Based on Bankruptcy Prediction Models—A Case Study of Poland," Sustainability, MDPI, vol. 14(3), pages 1-18, January.
    2. Joanna Wieprow & Agnieszka Gawlik, 2021. "The Use of Discriminant Analysis to Assess the Risk of Bankruptcy of Enterprises in Crisis Conditions Using the Example of the Tourism Sector in Poland," Risks, MDPI, vol. 9(4), pages 1-11, April.
    3. Omer Bagais & Khaled Aljaaidi & Abdulaziz Alothman, 2021. "An Empirical Investigation of the Associations of Short and Long Debt Policies with Economic Values of Energy Sector," International Journal of Energy Economics and Policy, Econjournals, vol. 11(1), pages 249-254.
    4. Mangirdas Morkunas & Gintaras Cernius & Gintare Giriuniene, 2019. "Assessing Business Risks of Natural Gas Trading Companies: Evidence from GET Baltic," Energies, MDPI, vol. 12(14), pages 1-14, July.

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    More about this item

    Keywords

    enterprise bankruptcy; enterprise bankruptcy statistics in Latvia; enterprise bankruptcy statistics in Lithuania; enterprise bankruptcy initiators;
    All these keywords.

    JEL classification:

    • M49 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Accounting - - - Other

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