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Please use this identifier to cite or link to this item: http://hdl.handle.net/2108/145

Title: Bankruptcy risk and productive efficiency in manufacturing firms
Authors: Becchetti, Leonardo
Sierra, Jaime
Issue Date: Dec-2000
Publisher: CEIS
Series/Report no.: Quaderni CEIS; 132
Abstract: The paper investigates the determinants of bankruptcy on three representative unbalanced samples of Italian firms for the periods 1989-1991, 1992-94 and 1995-97 with two different estimating techniques. The first (logit) approach shows that: i) the impact on the probability of bankruptcy of both level and trend balance sheet variables is sample - and business cycle specific since financial factors are predominant over real factors before periods of financial distress but not otherwise - with the exception of the interest charge to value added ratio which is always significant; ii) qualitative regressors such as customers' concentration and strength and proximity of competitors have significant predictive power and suggest that banks should not restrict their monitoring activity to balance sheet variables. The paper also shows, through a stochastic frontier approach, that productive efficiency and the probability of bankruptcy are significantly correlated and that the significance of th...
URI: http://hdl.handle.net/2108/145
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