On The Geographic And Cultural Determinants Of Bankruptcy

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.