Business Failure in UK and US Quoted Firms

Impact of Macroeconomic Instability and the Role of Legal Institutions

A. Bhattacharjee, C. Higson, S. Holly, P. Kattuman

    Research output: Working paper

    47 Downloads (Pure)

    Abstract

    Firms exit through the mutually precluding events of bankruptcy and acquisition. We use a competing risks hazard regression model to identify the characteristics leading to each of these two outcomes using over thirty years of data on US and UK quoted firms. We find evidence about the way in which macroeconomic factors affect firm survival in these two economies, in addition to firm and industry-specific factors. Further, there are significant differences in the way in which firms in the US and the UK react to changes in the macroeconomic environment and, particularly to macroeconomic instability. We argue that these differences in response may be attributable to differences in bankruptcy codes in the US and the UK.
    Original languageEnglish
    Place of PublicationCambridge
    PublisherFaculty of Economics, University of Cambridge
    Publication statusPublished - 2004

    Publication series

    NameCambridge Working Papers in Economics
    PublisherFaculty of Economics, University of Cambridge
    No.0420

    Fingerprint

    Macroeconomics
    Business failures
    Legal institutions
    Bankruptcy
    Industry
    Macroeconomic factors
    Hazard
    Regression model
    Competing risks
    Firm survival
    Firm exit
    Specific factors

    Keywords

    • Bankruptcy
    • Acquisitions
    • Macroeconomic instability
    • COMPETING RISKS
    • Cox Proportional Hazards Model
    • Chapter 11
    • receivership

    Cite this

    Bhattacharjee, A., Higson, C., Holly, S., & Kattuman, P. (2004). Business Failure in UK and US Quoted Firms: Impact of Macroeconomic Instability and the Role of Legal Institutions. (Cambridge Working Papers in Economics; No. 0420). Cambridge: Faculty of Economics, University of Cambridge.
    Bhattacharjee, A. ; Higson, C. ; Holly, S. ; Kattuman, P. / Business Failure in UK and US Quoted Firms : Impact of Macroeconomic Instability and the Role of Legal Institutions. Cambridge : Faculty of Economics, University of Cambridge, 2004. (Cambridge Working Papers in Economics; 0420).
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    Bhattacharjee, A, Higson, C, Holly, S & Kattuman, P 2004 'Business Failure in UK and US Quoted Firms: Impact of Macroeconomic Instability and the Role of Legal Institutions' Cambridge Working Papers in Economics, no. 0420, Faculty of Economics, University of Cambridge, Cambridge.

    Business Failure in UK and US Quoted Firms : Impact of Macroeconomic Instability and the Role of Legal Institutions. / Bhattacharjee, A.; Higson, C.; Holly, S.; Kattuman, P.

    Cambridge : Faculty of Economics, University of Cambridge, 2004. (Cambridge Working Papers in Economics; No. 0420).

    Research output: Working paper

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    KW - Cox Proportional Hazards Model

    KW - Chapter 11

    KW - receivership

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    Bhattacharjee A, Higson C, Holly S, Kattuman P. Business Failure in UK and US Quoted Firms: Impact of Macroeconomic Instability and the Role of Legal Institutions. Cambridge: Faculty of Economics, University of Cambridge. 2004. (Cambridge Working Papers in Economics; 0420).