Estimating financial distress likelihood
[EN] This study develops an ex-ante model for estimating financial distress likelihood (FDL), and contributes to the literature by presenting a financially-based definition of distress that is independent of its legal consequences, a theoretically supported model for the FDL, and an appropriate meth...
| Autores: | , , |
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| Formato: | artículo |
| Estado: | Versión publicada |
| Fecha de publicación: | 2008 |
| País: | España |
| Recursos: | Universidad de Salamanca (USAL) |
| Repositorio: | GREDOS. Repositorio Institucional de la Universidad de Salamanca |
| OAI Identifier: | oai:gredos.usal.es:10366/149751 |
| Acesso em linha: | http://hdl.handle.net/10366/149751 |
| Access Level: | acceso abierto |
| Palavra-chave: | Financial insolvency Financial distress likelihood Logit analysis 5311 Organización y Dirección de Empresas 5311.02 Gestión Financiera 5302.01 Indicadores Económico |
| Resumo: | [EN] This study develops an ex-ante model for estimating financial distress likelihood (FDL), and contributes to the literature by presenting a financially-based definition of distress that is independent of its legal consequences, a theoretically supported model for the FDL, and an appropriate methodology that uses panel data to eliminate the unobservable heterogeneity. The model is then estimated cross-sectionally to obtain an indicator of the likelihood of financial distress that incorporates the specificity of each company. In doing so, this study provides a well-specified model that is stable in terms of magnitude, sign and significance of the coefficients and, more importantly, that yields a measure of the FDL that is more robust to time and the international context than the estimates of FDL that are based on seminal models. This measure could be appropriate for use in future research that deals with FDL, such as capital structure and the prevention of financial distress. |
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