Moving in and out of financial distress: evidence for newly founded service sector firms

Arbeitspapier

The determinants of transitions between different states of financial distress are analyzed using two versions of Markov chain models: a multinomial logit model without random effects and a multinomial logit model capturing such unobservable factors. The empirical analysis is based on a panel data set containing information on 15,538 East German firms founded between 1994 and 1999. The estimation results indicate that the effect of limited liability depends upon firms' starting state, the existence of corporate shareholders improves firms' financial performance, multiple credit relationships have negative effects and product diversification as well as positive macroeconomic conditions improve firms' financial performance.

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Series: ZEW Discussion Papers ; No. 01-09

Classification and Topics

• Classification: Wirtschaft ; Statistical Simulation Methods: General ; Bankruptcy; Liquidation ; Multiple or Simultaneous Equation Models: Panel Data Models; Spatio-temporal Models
• Subject: financial distress ; Markov chains ; multinomial logit model ; simulated maximum ; Unternehmensgründung ; Zahlungsunfähigkeit ; Krisenmanagement ; Schätzung ; Eigentümerstruktur ; Beschränkte Haftung ; Gläubiger ; Diversifikation ; Neue Bundesländer

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Kaiser, Ulrich
• Event: Veröffentlichung
• (who): Zentrum für Europäische Wirtschaftsforschung (ZEW)
• (where): Mannheim
• (when): 2001

Further information

• Handle: http://hdl.handle.net/10419/24428
• Last update: 10.03.2025, 11:42 AM CET