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Borrowing Patterns, Bankruptcy and Voluntary Liquidation

António Antunes (), Pedro Portugal and José Mata ()

Working Papers from Banco de Portugal, Economics and Research Department

Abstract: We study the impact of financial variables upon bankruptcy and voluntary exit. Controlling for efficiency, which we find to decrease the odds of both bankruptcy and voluntary exit, characteristics of firms which correlate with the firms' access to funds, exert very different impacts upon the two modes of exit.Our findings support the idea that information asymmetries create cash constraints and that financial decisions are used to signal firms' quality and reduce the degree of information asymmetries between borrowers and lenders.

JEL-codes: C35 D22 G21 G33 (search for similar items in EconPapers)
Date: 2010
New Economics Papers: this item is included in nep-cfn
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