On The Geographic And Cultural Determinants Of Bankruptcy
Source: University of St. Gallen
This paper examines the role of geography and culture in explaining firm bankruptcy. The authors adopt survival analyses to model the bankruptcy risk of a firm, allowing for time-varying covariates. Based on a large sample from all major sectors of the Swiss economy, they find the following results: The geographic location of a firm, which is characterized using a core-periphery approach, has a significant impact on its bankruptcy risk; Variables proxying for the cultural environment of a firm have significant explanatory power; The results of the previous literature on the standard determinants of bankruptcy are confirmed.