Financial distress and cycle-sensitive corporate investments

Peeter Maripuu · Kadri Männasoo

12 citations0/0 files storedBaltic Journal of Economics

No readable copy stored yet — this record is metadata only.

No open-access location is known for this record yet.

Literature note Cite in a project Citation map

Financial Distress and Bankruptcy Prediction Corporate Finance and Governance Corporate Insolvency and Governance

Abstract

This paper attempts to explain the link between corporate investments in different phases of the economic cycle and company financial distress. The data were derived from the Estonian Centre of Registers and Information Systems and contained the population of Estonian businesses from four economic activity areas – manufacturing; wholesale and retail trade; transportation and storage; and construction and real estate – and covered the period from 1995 to 2010. A firm was defined as distressed if it breached the minimum capital requirements set by law. The results demonstrate that all the investment-related factors matter for financial distress, with timing, intensity, sector, and type of investment all playing a role. Furthermore, the data seem to suggest that investment in tangibles is more cycle-sensitive for the transport and construction and real estate sectors and investment in working capital is more cycle-sensitive for manufacturing and merchandise, which stresses the importance of getting the timing right for different investment types in different industries.

Paper brief

Loading…

Cite this work

Citation unavailable for this work.

BibTeX RIS CSL-JSON

No public copy is stored for this record, so only the metadata is cited.

Citations in this library

Citation map →

Stored only when both papers are in the corpus — 12 citations exist upstream.

References

1968FINANCIAL RATIOS, DISCRIMINANT ANALYSIS AND THE PREDICTION OF CORPORATE BANKRUPTCY 1966Financial Ratios As Predictors of Failure 2006Bankruptcy prediction in banks and firms via statistical and intelligent techniques – A review 2005Bankruptcy prediction using support vector machine with optimal choice of kernel function parameters 2006Predicting corporate bankruptcy: where we stand?1983The Assessment of Company Solvency and Performance Using a Statistical Model 1985Classifying Bankrupt Firms with Funds Flow Components 2002A case-based reasoning with the feature weights derived by analytic hierarchy process for bankruptcy prediction

Cited by

2024Accounting Conservatism as a Protective Mechanism

Explore the map →

Papers that cite the same references — the relational fallback while embeddings are still backfilling.

Imported from OpenAlex (CC0) — nothing here is generated.