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Description, explanation, prediction the evolution of bankruptcy studies

Description, explanation, prediction the evolution of bankruptcy studies This paper describes a number of models used in bankruptcy studies to date. They arise from two basic model designs used in studies of financial distress: cross-sectional studies that compare healthy and distressed firms, and time-series formulations that study the path to failure of (usually) distressed firms only. These two designs inherently foster different research objectives. Different instances of the most recent work taken from each of the above research groups, broadly categorized by design, are described here including new work by this author. It is argued that those that investigate the distress continuum with predominantly explanatory objectives are superior on a number of criteria to the studies that follow what is essentially a case-control structure and espouse prediction as their objective. http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png Managerial Finance Emerald Publishing

Description, explanation, prediction the evolution of bankruptcy studies

Managerial Finance , Volume 27 (4): 16 – Apr 1, 2001

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References (19)

Publisher
Emerald Publishing
Copyright
Copyright © Emerald Group Publishing Limited
ISSN
0307-4358
DOI
10.1108/03074350110767123
Publisher site
See Article on Publisher Site

Abstract

This paper describes a number of models used in bankruptcy studies to date. They arise from two basic model designs used in studies of financial distress: cross-sectional studies that compare healthy and distressed firms, and time-series formulations that study the path to failure of (usually) distressed firms only. These two designs inherently foster different research objectives. Different instances of the most recent work taken from each of the above research groups, broadly categorized by design, are described here including new work by this author. It is argued that those that investigate the distress continuum with predominantly explanatory objectives are superior on a number of criteria to the studies that follow what is essentially a case-control structure and espouse prediction as their objective.

Journal

Managerial FinanceEmerald Publishing

Published: Apr 1, 2001

Keywords: Accounting research; Company failures; Modelling; Predictive validity; Service industries; USA

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