Management-to-staff ratio and a firm's exit
Nicolae Stef and
Journal of Business Research, 2021, vol. 125, issue C, 252-260
We investigate the predictive ability of the management-to-staff ratio for the arbitration between liquidation and voluntary dissolution. Using a sample of 697 French firms covering the period from 2011 to 2017, our hazard model shows that firms with more managerial staff tend to have a lower probability of exiting through liquidation rather than through voluntary dissolution. Compared to liquidation, voluntary dissolution not only provides the opportunity to organize the liquidation of a firm's remaining assets, but it also better preserves managers’ reputation.
Keywords: Management; Liquidation; Voluntary dissolution; Hazard model (search for similar items in EconPapers)
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Persistent link: https://EconPapers.repec.org/RePEc:eee:jbrese:v:125:y:2021:i:c:p:252-260
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