Assessing viability of Finnish reorganization and bankruptcy firms

Abstract

Viability, Reorganization, Bankruptcy, Finnish Company Reorganization Act, Logistic regression analysis, Finnish firms, G, G3, G33, K, K2, K29, M, M4, M41,

Which Characteristics Predict the Survival of Insolvent Firms? An SME Reorganization Prediction Model

“…The following conclusion can be drawn from this finding: construction companies will be liquidated when they come into the bankruptcy process, regardless of their economic and financial situation. Extensive research corroborates this conclusion (Chava and Jarrow ; Laitinen ). (4) There are only two rules related to reorganization. These two rules refer to companies in the manufacturing sector with high values for the size variable (rule 32) and to very high values for the cash ratio and ROA (rule 31).…”

“…Moreover, there is no empirical study based on the current Spanish reorganization proceedings. Although the sample used is Spanish, our results could be applied to other nations and bankrupt SMEs (Laitinen ). Third, this study completes existing research on bankruptcy prediction based on rough set (RS) and PART methodologies.…”

Corporate Crisis and Sustainable Reorganization: Evidence from Bankrupt Austrian SMEs

“…In contrast to many other studies (for example, Bates and Nucci ; Geroski, Mata, and Portugal ; Kalleberg and Leicht ), our analyses provide no evidence that firm size relates to a sustainable reorganization. On the one hand, this can be explained by the characteristics of our sample: As previously mentioned, our sample is highly skewed toward very small firms, which have been largely neglected by previous research (Laitinen ). Due to this skewness, differences in firm size are insignificant and thus the size effect of no relevance.…”

“…Second, previous surveys predominantly collected data at a single point in time. Consequently, longitudinal studies (as called for by Madrid‐Guijarro, García‐Pérez‐de‐Lema, and Van Auken , as well as Laitinen ) seem promising in order to gain further insights into the way SMEs cope with corporate crisis and into the long‐term success of their restructuring efforts. To the best of our knowledge, this is the first study that uses longitudinal data to explore which factors are important for SMEs to successfully survive bankruptcy in the long run and identifies which resources drive a sustainable turnaround.…”

“…It therefore contributes to the growing body of literature on crisis and turnaround in an SME setting, and offers unique insights. Our study included very small firms, which are rarely the focus of research, and thus adds to extant research, as called for by Laitinen (). Most studies are based exclusively on financial variables (Balcaen and Ooghe ).…”