Multiple States of Financially Distressed Companies : Tests using a Competing-risks Model

Australasian Accounting, Business and Finance Journal

关键词: Financial distress;    Survival analysis;    Competing-risks model;   

DOI  :  

来源: DOAJ

【 摘 要 】

This study examines the determinants of multiple states of financial distress by applying a competing-risksmodel. 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: activecompanies; distressed external administration companies; and distressed takeover, merger or acquisitioncompanies. A sample of 1,081 publicly listed Australian non-financial companies over the period 1989 to2005 using a competing-risks model is used to determine the possible differences in the factors of enteringvarious states of financial distress. It is found that specifically, distressed external administration companieshave a higher leverage, lower past excess returns and a larger size; while distressed takeover, merger oracquisition companies have a lower leverage, a higher capital utilisation efficiency and a larger size comparedto active companies. Comparing the results from both the single-risk model and the competing-risks modelreveals the need to distinguish between financial distress states.

【 授权许可】

Unknown