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Constraints of Spanish Insolvency Law. A predictive bankruptcy model for Spanish industrial SMEs (2007-2015)

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  • Salvador Ortí-Camallonga

    (Department of Finance, University of Valencia, Spain)

Abstract

Why almost 90% of Spanish SMEs that declare insolvency end up in liquidation? Academic works on insolvency focus either on legal terms – normative bias, impact on business’ death rate, and contrast to internal restructuring processes, to name a few – or on financial aspects – especially bankruptcy predictive models – . This work argues that a combined approach could be elucidating. For this purpose, it configures a predictive model – inspired on Atlman’s z-score – for Spanish SMEs of industrial sectors for the period 2007-2015. This investigation argues that operative difficulties can be detected well in advance to official declaration of insolvency; and provides specific evidence of Spanish Law constraints.

Suggested Citation

  • Salvador Ortí-Camallonga, 2018. "Constraints of Spanish Insolvency Law. A predictive bankruptcy model for Spanish industrial SMEs (2007-2015)," Working Papers 2018/01, Economics Department, Universitat Jaume I, Castellón (Spain).
    • Handle: RePEc:jau:wpaper:2018/01
    as

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    References listed on IDEAS

    as
    1. Miguel García-Posada & Raquel Vegas, 2016. "Las reformas de la Ley Concursal durante la Gran Recesión," Working Papers 1610, Banco de España.
    2. Miguel García-Posada & Juan Mora-Sanguinetti, 2014. "Are there alternatives to bankruptcy? A study of small business distress in Spain," SERIEs: Journal of the Spanish Economic Association, Springer;Spanish Economic Association, vol. 5(2), pages 287-332, August.
    3. Carlos Lopez Gutiérrez & Begoña Torre Olmo & Sergio Sanfilippo Azofra, 2012. "Firms’ performance under different bankruptcy systems: a Europe–USA empirical analysis," Accounting and Finance, Accounting and Finance Association of Australia and New Zealand, vol. 52(3), pages 849-872, September.
    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    Insolvency Proceedings; Spanish SMEs; Bankruptcy forecast; Logistic Regression; Financial Distress;
    All these keywords.

    JEL classification:

    • G34 - Financial Economics - - Corporate Finance and Governance - - - Mergers; Acquisitions; Restructuring; Corporate Governance
    • G17 - Financial Economics - - General Financial Markets - - - Financial Forecasting and Simulation
    • K10 - Law and Economics - - Basic Areas of Law - - - General (Constitutional Law)

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