Economic and financial determinants of firm bankruptcy: evidence from the French food industry

Lilia Aleksanyan and Jean-Pierre Huiban

Review of Agricultural, Food and Environmental Studies, vol. 97, issue 2

Abstract: Despite the strong resilience of the French food industry during the recent economic crisis, the bankruptcy rate for this sector has dramatically increased since 2010. This paper focuses on the economic and financial determinants of firm exit due to bankruptcy in the French food industry and compares them with those for other manufacturing industries. Based on a large sample of firm-level data for the period 2001–2012, we show that the bankruptcy risk pattern differs between food industry firms and other manufacturing firms. Firm productivity is an important determinant of a firm’s probability of going bankrupt; productivity begins deteriorating 3 years before a failure. Controlling for firm productivity, we also show that credit cost has a positive and significant impact on the probability of bankruptcy. However, we observe smaller effect of credit cost on firms’ bankruptcy risk. In contrast, productivity appears to have an important beneficial effect on bankruptcy risk reduction.

Keywords: Financial Economics; Industrial Organization (search for similar items in EconPapers)
References: Add references at CitEc
Citations: View citations in EconPapers (8)

Downloads: (external link)
https://ageconsearch.umn.edu/record/277766/files/A ... ancialDeterminan.pdf (application/pdf)

Related works:
Journal Article: Economic and financial determinants of firm bankruptcy:evidence from the French food industry (2016)
Journal Article: Economic and financial determinants of firm bankruptcy: evidence from the French food industry (2016)
Working Paper: Economic and Financial Determinants of Firm Bankruptcy: Evidence from the French Food Industry (2015)
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:ags:frrfes:277766

DOI: 10.22004/ag.econ.277766

Access Statistics for this article

More articles in Review of Agricultural, Food and Environmental Studies from Institut National de la Recherche Agronomique (INRA) Contact information at EDIRC.
Bibliographic data for series maintained by AgEcon Search ().