Doomed Firms: An Econometric Analysis of the Path to Failure

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Ashgate, 2003 - Business & Economics - 233 pages
This text provides a comprehensive treatise on financial distress modelling. Since many of the challenges facing researchers of financial distress can only be addressed by a new research design and modelling methodology, the work in this book concentrates on extending the potential for bankruptcy analysis from single-equation modelling to multi-equation analysis. Essentially, the author's work provides an innovative approach by comparing each firm with itself over time rather than testing specific hypotheses or improving predictive and classificatory accuracy. process - is applied in the form of a family of models of which the traditional single equation logit or MDA model is just a special case. Preliminary two-equation and three-equation models are presented and tested in the final chapters as a taste of things to come. The groundwork for a full treatise on these sorts of multi-equation systems is laid for further study - this family of models could be used as a basis for more specific applications to different industries and to test hypotheses concerning influential variables to bankruptcy risk.

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Contents

THEORETICAL ISSUES
1
Precursors and Challenges in the Literature
11
A New Modelling Methodology
45
Copyright

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