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Post-reorganization survival: a semi-parametric and non-parametric analysis of firm characteristics

Lara Abdel Fattah, Sylvain Barthélémy, Nadine Levratto and Benjamin Trempont

No 2016-22, EconomiX Working Papers from University of Paris Nanterre, EconomiX

Abstract: This paper aims at bringing evidence on firm survival after bankruptcy. Instead of considering survival as a binary variable we take into account the duration of the reorganization procedure. We follow a sample of French firms throughout their restructuring process and document factors influencing the reorganization outcome. Based on the existing theoretical and empirical literature on the link between firm ownership structure and performance, we particularly focus on the influence of firm affiliation to a business group and business groups characteristics. Using a Cox proportional hazards model and a Random Forests model, we find that firm structural and financial characteristics have a strong power to explain survival at different time horizons, however, very few of firm financial characteristics used previously for bankruptcy prediction are useful for predicting the final outcome of reorganization once a reorganization plan is voted. In addition, we show that firm ownership structure proxied by firm affiliation to a business group and business group characteristics has no significant influence on the outcome and duration of reorganization.

Keywords: reorganization; bankruptcy; survival; business groups; Cox model; Random Forests. (search for similar items in EconPapers)
JEL-codes: G33 K20 C14 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-bec, nep-ent and nep-sbm
Date: 2016
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Persistent link: https://EconPapers.repec.org/RePEc:drm:wpaper:2016-22

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