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Predicting survival prospect of corporate restructuring in Korea

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  • Minchoul Kim
  • Minho Kim
  • Ronald McNiel

Abstract

The purpose of this article is to identify the success factors of corporate restructuring by studying the firms that have survived from the financial distress in South Korea. The logit analysis is used with the two qualitative variables of success and failure. Selected independent variables are firm risk, free asset, audit opinion, liquidity, firm size and period of existence. The results show that audit opinion, risk of the firm and firm size are the important variables in predicting the survival prospect of financially distressed firms. The percentage of correct prediction is 81.4% for the estimation sample.

Suggested Citation

  • Minchoul Kim & Minho Kim & Ronald McNiel, 2008. "Predicting survival prospect of corporate restructuring in Korea," Applied Economics Letters, Taylor & Francis Journals, vol. 15(15), pages 1187-1190.
    • Handle: RePEc:taf:apeclt:v:15:y:2008:i:15:p:1187-1190
    DOI: 10.1080/13504850601018080
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    References listed on IDEAS

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    Cited by:

    1. Alexandra Bertschi-Michel & Philipp Sieger & Thomas Wittig & Andreas Hack, 2023. "Sacrifice, Protect, and Hope for the Best: Family Ownership, Turnaround Moves, and Crisis Survival," Entrepreneurship Theory and Practice, , vol. 47(4), pages 1132-1168, July.
    2. Muñoz-Izquierdo, Nora & Segovia-Vargas, María Jesús & Camacho-Miñano, María-del-Mar & Pascual-Ezama, David, 2019. "Explaining the causes of business failure using audit report disclosures," Journal of Business Research, Elsevier, vol. 98(C), pages 403-414.
    3. Nora Muñoz-Izquierdo & María-del-Mar Camacho-Miñano & María-Jesús Segovia-Vargas & David Pascual-Ezama, 2019. "Is the External Audit Report Useful for Bankruptcy Prediction? Evidence Using Artificial Intelligence," IJFS, MDPI, vol. 7(2), pages 1-23, April.
    4. Camacho-Miñano, María-del-Mar & Muñoz-Izquierdo, Nora & Pincus, Morton & Wellmeyer, Patricia, 2024. "Are key audit matter disclosures useful in assessing the financial distress level of a client firm?," The British Accounting Review, Elsevier, vol. 56(2).

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