Financial Distress: Firms Before and After the 2008 Crisis

Lubomir Lizal, Jiri Schwarz
Work package: 
WP 4
Publication number: 
01 February 2012

Abstract: The main factors influencing the probability of bankruptcy are analyzed on Czech Republic firm level using financial and other data from the period 2006–2011, i.e. before and after the crisis of 2008. The staring basic models of the bankruptcy are compared. We show that the determinants indeed do change between period of economic growth and distress. We also show that the large and small firms have a different set of determinants of distress. Finally we assess effects of various corporate governance indicators of the enterprises on predicted possibility of default.

Please note this is a preliminary draft. Please do not quote without the authors’ permission.

JEL Classification: G33, G34, P21, K2

Keywords: financial distress, bankruptcy, Czech Republic, firm level data

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