Multiple states of financially distressed companies: Tests using a competing-risks model
Data(s) |
01/01/2010
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Resumo |
This study examines the determinants of multiple states of financial distress by applying a competing-risks model. It investigates the effect of financial ratios, market-based variables and company-specific variables, including company age, size and squared size on three different states of corporate financial distress: active companies; distressed external administration companies; and distressed takeover, merger or acquisition companies. A sample of 1,081 publicly listed Australian non-financial companies over the period 1989 to 2005 using a competing-risks model is used to determine the possible differences in the factors of entering various states of financial distress. It is found that specifically, distressed external administration companies have a higher leverage, lower past excess returns and a larger size; while distressed takeover, merger or acquisition companies have a lower leverage, a higher capital utilisation efficiency and a larger size compared to active companies. Comparing the results from both the single-risk model and the competing-risks model reveals the need to distinguish between financial distress states. |
Identificador | |
Idioma(s) |
eng |
Publicador |
University of Wollongong, School of Accounting and Finance |
Relação |
http://dro.deakin.edu.au/eserv/DU:30078308/tian-multiplestates-2010.pdf |
Direitos |
2010, University of Wollongong, School of Accounting and Finance |
Palavras-Chave | #Financial distress #Survival analysis #Competing-risks model |
Tipo |
Journal Article |