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Failure processes of exporting firms: evidence from France

Failure processes of exporting firms: evidence from France PurposeThis paper aims to detect failure processes of French exporting firms and study their contingency with export processes.Design/methodology/approachThe sample consisted of 131 bankrupted exporting firms from Bureau van Dijk’s Amadeus database. Factor and cluster analyses of six financial variables from Laitinen’s (1991) model were used to detect failure processes. Export processes were detected with cluster analysis of export share in total turnover. Contingency between failure and export processes was studied with a statistical test.FindingsThree different failure processes existed for exporting firms. Two of these processes, which accounted for 79 per cent of firms, were classified as gradual failure: a step-by-step worsening of financial performance before the bankruptcy was declared. One was a symbiotic process reflecting varying pre-bankruptcy behaviours of different financial variables. Two different types of exporters existed. Most firms (77 per cent) were occasional exporters, while 23 per cent were constantly and more strongly involved in international markets before their bankruptcy was declared. There was no contingency between failure and export processes.Originality/valueThis study is the first one to detect failure processes specifically for exporting firms based on financial variables. In line with previous literature about non-exporting firms, gradual failure processes were most characteristic to exporting firms. The study shows that different types of exporters were not characterized by any unique behaviour of financial variables before their bankruptcy was declared. http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png Review of International Business and Strategy Emerald Publishing

Failure processes of exporting firms: evidence from France

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Publisher
Emerald Publishing
Copyright
Copyright © Emerald Group Publishing Limited
ISSN
2059-6014
DOI
10.1108/RIBS-03-2017-0020
Publisher site
See Article on Publisher Site

Abstract

PurposeThis paper aims to detect failure processes of French exporting firms and study their contingency with export processes.Design/methodology/approachThe sample consisted of 131 bankrupted exporting firms from Bureau van Dijk’s Amadeus database. Factor and cluster analyses of six financial variables from Laitinen’s (1991) model were used to detect failure processes. Export processes were detected with cluster analysis of export share in total turnover. Contingency between failure and export processes was studied with a statistical test.FindingsThree different failure processes existed for exporting firms. Two of these processes, which accounted for 79 per cent of firms, were classified as gradual failure: a step-by-step worsening of financial performance before the bankruptcy was declared. One was a symbiotic process reflecting varying pre-bankruptcy behaviours of different financial variables. Two different types of exporters existed. Most firms (77 per cent) were occasional exporters, while 23 per cent were constantly and more strongly involved in international markets before their bankruptcy was declared. There was no contingency between failure and export processes.Originality/valueThis study is the first one to detect failure processes specifically for exporting firms based on financial variables. In line with previous literature about non-exporting firms, gradual failure processes were most characteristic to exporting firms. The study shows that different types of exporters were not characterized by any unique behaviour of financial variables before their bankruptcy was declared.

Journal

Review of International Business and StrategyEmerald Publishing

Published: Sep 4, 2017

References