Business failure: a literature review

Défaillance des entreprises: revue de littérature

Rahma Mzouri and Abdelkrim Kandrouch
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Rahma Mzouri: Faculté des Sciences Juridiques, Economiques et Sociales - UM5 - Université Mohammed V de Rabat [Agdal]
Abdelkrim Kandrouch: Faculté des Sciences Juridiques, Economiques et Sociales - UM5 - Université Mohammed V de Rabat [Agdal]

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Abstract: Corporate failure constitutes a major economic, legal, and social issue, particularly in emerging economies such as Morocco. This article provides a critical synthesis of the theoretical and empirical approaches to understanding and predicting corporate bankruptcy, through an examination of financial, structural, and institutional determinants. Drawing on the international literature and the specific characteristics of the Moroccan context, it addresses the multidimensional nature of financial distress, the costs associated with corporate failure, resolution mechanisms, and the principal predictive models. A critical discussion of these paradigms is conducted by assessing their statistical assumptions, respective predictive performance, and theoretical as well as practical limitations. The article adopts a comparative perspective to shed light on epistemological controversies related to the selection of indicators and the determination of the optimal cut-off threshold. It is argued that the evolution of the field does not stem from a mere technological substitution, but rather from a cumulative trajectory of increasing endogenization, in which technical approaches must be articulated with economic and legal interpretative frameworks. Finally, this synthesis opens a discussion on prospects for multi-model integration, algorithmic transparency, and interpretative sovereignty in the context of the accelerating digitalization of finance. Keywords: Corporate failure, financial distress, Morocco, capital structure, predictive models, liquidation, governance, forecasting. JEL Classification: C53, G32 Type of paper: Theoretical research.

Keywords: financial distress; predictive models; capital structure; Morocco; governance; gouvernance; liquidation; modèles prédictifs; structure financière; Maroc; détresse financière; Défaillance d'entreprise; Défaillance d'entreprise détresse financière Maroc structure financière modèles prédictifs liquidation gouvernance prévision. (search for similar items in EconPapers)
Date: 2026-02-23
New Economics Papers: this item is included in nep-ara
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Published in International Journal of Accounting, Finance, Auditing, Management and Economics, A paraître, ⟨10.5281/zenodo.18614550⟩

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Persistent link: https://EconPapers.repec.org/RePEc:hal:journl:hal-05527901

DOI: 10.5281/zenodo.18614550

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