THE IMPACT OF FINANCIAL STRUCTURE ON FIRMS’ PROBABILITY OF BANKRUPTCY: A COMPARISON ACROSS WESTERN EUROPE CONVERGENCE REGIONS

Lidia Mannarino () and Marianna Succurro ()
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Marianna Succurro: Dipartimento di Scienze Economiche, Statistiche e Finanziarie, Università della Calabria

No 201305, Working Papers from Università della Calabria, Dipartimento di Economia, Statistica e Finanza "Giovanni Anania" - DESF

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.

Keywords: Financial Structure; Probability of Bankruptcy; Convergence Regions (search for similar items in EconPapers)
JEL-codes: D92 E22 G33 L1 (search for similar items in EconPapers)
Pages: 19 pages
Date: 2013-04
New Economics Papers: this item is included in nep-eec, nep-eff and nep-ent
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

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http://www.ecostat.unical.it/RePEc/WorkingPapers/WP05_2013.pdf First version, 2013-04 (application/pdf)

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Persistent link: https://EconPapers.repec.org/RePEc:clb:wpaper:201305

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