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The Impact Of Financial Structure On Firms’ Probability Of Bankruptcy: A Comparison Across Western Europe Convergence Regions

Author

Listed:
  • Lidia Mannarino
  • Marianna Succurro

    (Dipartimento di Scienze Economiche, Statistiche e Finanziarie, Università della Calabria)

Abstract

The aim of the paper is to investigate the impact of financial structure on firms’ probability of bankruptcy in Western Europe convergence regions. The empirical evidence shows that the financial structure is a key factor explaining firms’ bankruptcy, but while the debt, the cash flow and the profitability ratios are strongly significant in explaining firms’ failure, structure and operational ratios are not relevant factors of bankruptcy. Additional differences arise when we consider the countries separately: while debt and cash flow ratios are significant for bank based economies, they are not significant for market oriented countries.

Suggested Citation

  • Lidia Mannarino & Marianna Succurro, 2013. "The Impact Of Financial Structure On Firms’ Probability Of Bankruptcy: A Comparison Across Western Europe Convergence Regions," Working Papers 201305, Università della Calabria, Dipartimento di Economia, Statistica e Finanza "Giovanni Anania" - DESF.
    • Handle: RePEc:clb:wpaper:201305
    as

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    File URL: http://www.ecostat.unical.it/RePEc/WorkingPapers/WP05_2013.pdf
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    References listed on IDEAS

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    More about this item

    Keywords

    Financial Structure; Probability of Bankruptcy; Convergence Regions;
    All these keywords.

    JEL classification:

    • D92 - Microeconomics - - Micro-Based Behavioral Economics - - - Intertemporal Firm Choice, Investment, Capacity, and Financing
    • E22 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Investment; Capital; Intangible Capital; Capacity
    • G33 - Financial Economics - - Corporate Finance and Governance - - - Bankruptcy; Liquidation
    • L1 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance

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