Accounting Variables and Bankruptcy Risk for Non-Listed Firms
49 Pages Posted: 6 Oct 2009 Last revised: 10 Sep 2012
Date Written: June 10, 2012
In this paper I investigate the relation between accounting based variables and bankruptcy risk, using information available for non-listed firms. I use a large sample of firms and find that many of the variables suggested earlier in the literature seem to provide little explanatory power. Further, I find that industry classification does not add much explanatory power of bankruptcy risk not captured by other variables. I suggest a seven-factor model including accounting variables and firm age which performs well out-of-sample. The results suggest that estimated coefficients are unstable, but that the variables are consistently strong determinants of bankruptcy risk.
Keywords: Bankruptcy Risk, Hazard Models, Cox Regressions, Private Firms
JEL Classification: G33, M41, C41
Suggested Citation: Suggested Citation