Premium
Direct Bankruptcy Costs: Evidence from the Trucking Industry
Author(s) -
Guffey Daryl M.,
Moore William T.
Publication year - 1991
Publication title -
financial review
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.621
H-Index - 47
eISSN - 1540-6288
pISSN - 0732-8516
DOI - 10.1111/j.1540-6288.1991.tb00378.x
Subject(s) - bankruptcy , trucking industry , business , sample (material) , indirect costs , value (mathematics) , finance , manufacturing , accounting , truck , marketing , engineering , chemistry , chromatography , machine learning , computer science , aerospace engineering
Direct costs of bankruptcy are measured for a sample of firms in the trucking industry that petitioned for bankruptcy protection from 1970 to 1985. Average direct bankruptcy costs represent 9.12 percent of the book value of total assets as of the year before filing. These costs are large compared with those reported in prior studies: 3.39 percent of book value of assets for retail firms, 4.31 percent for industrials, and .53 percent for railroads. We also find evidence of substantial economies of scale in bankruptcy costs in the trucking sample.