The relationship between bankruptcy risk and growth for non-listed firms

Kjell Bjørn Nordal and Randi Næs

No 2010/31, Working Paper from Norges Bank

Abstract: We investigate the relationship between bankruptcy risk and expected future sales growth for Norwegian non-listed firms for the period 1988-2007. We find that firms with high bankruptcy risk also have high expected future growth. Financial ratios characterizing firms with high bankruptcy risk also characterize firms with high future expected growth. Small firms, firms with low levels of equity and retained earnings, firms with low profitability and low levels of sales per unit of capital, have all higher expected future growth rates than other firms. These findings suggest a tradeoff between the upside potential of high growth and the downside risk of bankruptcy.

Keywords: Non-listed firms; growth; bankruptcy risk (search for similar items in EconPapers)
JEL-codes: G10 G30 G33 (search for similar items in EconPapers)
Pages: 30 pages
Date: 2010-12
New Economics Papers: this item is included in nep-ban, nep-bec, nep-ent, nep-fdg and nep-rmg
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

Downloads: (external link)
https://www.norges-bank.no/en/news-events/news-pub ... pers/2010/WP-201031/

Related works:
Working Paper: The relationship between bankruptcy risk and growth for non-listed firms (2010)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:bno:worpap:2010_31

Access Statistics for this paper

More papers in Working Paper from Norges Bank Contact information at EDIRC.
Bibliographic data for series maintained by ().