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

Lilia Aleksanyan () and Jean-Pierre Huiban
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Lilia Aleksanyan: Université Paris 1 Panthéon Sorbonne, F-75000 Paris, France

Review of Agricultural, Food and Environmental Studies, 2016, vol. 97, issue 2, 89-108

Abstract: Despite the strong resilience of the French foodindustry during the recent economic crisis, the bankruptcy ratefor this sector has dramatically increased since 2010. Thispaper focuses on the economic and financial determinants offirm exit due to bankruptcy in the French food industry andcompares them with those for other manufacturing industries.Based on a large sample of firm-level data for the period2001–2012, we show that the bankruptcy risk pattern differsbetween food industry firms and other manufacturing firms.Firm productivity is an important determinant of a firm’sprob-ability of going bankrupt; productivity begins deteriorating3 years before a failure. Controlling for firm productivity, wealso show that credit cost has a positive and significant impacton the probability of bankruptcy. However, we observe small-er effect of credit cost on firms’bankruptcy risk. In contrast,productivity appears to have an important beneficial effect onbankruptcy risk reduction.

Keywords: Firm; exit.Firm; bankruptcy.Cost; of; credit.Productivity.Food; industry (search for similar items in EconPapers)
Date: 2016
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Related works:
Journal Article: Economic and financial determinants of firm bankruptcy: evidence from the French food industry (2016) Downloads
Working Paper: Economic and Financial Determinants of Firm Bankruptcy: Evidence from the French Food Industry (2015) Downloads
Journal Article: Economic and financial determinants of firm bankruptcy: evidence from the French food industry Downloads
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