Open AccessCorporate Failure
Author(s) -
Ben Jabeour Sami
Publication year - 2013
Publication title -
international journal of finance and banking studies
Language(s) - English
Resource type - Journals
ISSN - 2147-4486
DOI - 10.20525/ijfbs.v2i3.157
Subject(s) - financial distress , context (archaeology) , economics , predictive value , bank failure , distress , financial ratio , econometrics , actuarial science , accounting , finance , financial system , psychology , geography , medicine , psychotherapist , archaeology
A number of authors suggested that the impact of the macroeconomic factors on the incidence of the financial distress, and afterward in case of failure of companies. However, macroeconomic factors rarely, if ever, appear as variables in predictive models that seek to identify distress and failure; modellers generally suggest that the impact of macroeconomic factors has already been taken into account by financial ratio variables. This article presents a systematic study of this domain, by examining the link between the failure of companies and macroeconomic factors for the French companies to identify the most important variables and to estimate their utility in a predictive context. The results of the study suggest that several macroeconomic variables are strictly associated to the failure, and have a predictive value by specifying the relation between the financial distress and the failure.