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From distress to exit: determinants of the time to exit

Sofie Balcaen UGent, Sophie Manigart UGent and Hubert Ooghe (2011) JOURNAL OF EVOLUTIONARY ECONOMICS. 21(3). p.407-446
abstract
This paper analyses the duration of the time to exit of distressed firms, differentiating between court driven exits (mainly bankruptcies) and voluntary liquidations. It examines how long firms survive after initial signs of economic distress. The study is conducted on an extensive dataset of 5,233 Belgian distress-related exits of mature firms, the majority being privately held. The results highlight that slack resources have an opposite effect on the timing of court driven exits and voluntary liquidations. On the one hand, high levels of available and potential slack increase the time to court driven exit, as they allow distressed firms to postpone an impending court driven exit. On the other hand, high available slack resources shorten the time to voluntary liquidation, since they make voluntary liquidation easier. Further, a high level of stakeholder dependence increases the time to exit after distress, whether the firm exits through voluntary liquidation or through a court decided exit. This is explained by the fact that stakeholder dependence increases the complexity of the exit decision and the exit procedure.
Please use this url to cite or link to this publication:
author
organization
year
type
journalArticle (original)
publication status
published
subject
keyword
TURNAROUND STRATEGIES, SMALL BUSINESS DATA, ORGANIZATIONAL SLACK, FINANCIAL DISTRESS, DOWNSIDE RISK, FIRMS, BANKRUPTCY, PERFORMANCE, DURATION, CREDIT, Firm exit, Distress, Court driven exit, Voluntary liquidation, Slack resources, Stakeholders
journal title
JOURNAL OF EVOLUTIONARY ECONOMICS
J. Evol. Econ.
volume
21
issue
3
pages
407 - 446
Web of Science type
Article
Web of Science id
000294405900003
JCR category
ECONOMICS
JCR impact factor
1 (2011)
JCR rank
123/320 (2011)
JCR quartile
2 (2011)
ISSN
0936-9937
DOI
10.1007/s00191-010-0192-2
language
English
UGent publication?
yes
classification
A1
copyright statement
I have transferred the copyright for this publication to the publisher
id
2033929
handle
http://hdl.handle.net/1854/LU-2033929
date created
2012-02-15 14:05:48
date last changed
2012-02-16 09:16:50
@article{2033929,
  abstract     = {This paper analyses the duration of the time to exit of distressed firms, differentiating between court driven exits (mainly bankruptcies) and voluntary liquidations. It examines how long firms survive after initial signs of economic distress. The study is conducted on an extensive dataset of 5,233 Belgian distress-related exits of mature firms, the majority being privately held. The results highlight that slack resources have an opposite effect on the timing of court driven exits and voluntary liquidations. On the one hand, high levels of available and potential slack increase the time to court driven exit, as they allow distressed firms to postpone an impending court driven exit. On the other hand, high available slack resources shorten the time to voluntary liquidation, since they make voluntary liquidation easier. Further, a high level of stakeholder dependence increases the time to exit after distress, whether the firm exits through voluntary liquidation or through a court decided exit. This is explained by the fact that stakeholder dependence increases the complexity of the exit decision and the exit procedure.},
  author       = {Balcaen, Sofie and Manigart, Sophie and Ooghe, Hubert},
  issn         = {0936-9937},
  journal      = {JOURNAL OF EVOLUTIONARY ECONOMICS},
  keyword      = {TURNAROUND STRATEGIES,SMALL BUSINESS DATA,ORGANIZATIONAL SLACK,FINANCIAL DISTRESS,DOWNSIDE RISK,FIRMS,BANKRUPTCY,PERFORMANCE,DURATION,CREDIT,Firm exit,Distress,Court driven exit,Voluntary liquidation,Slack resources,Stakeholders},
  language     = {eng},
  number       = {3},
  pages        = {407--446},
  title        = {From distress to exit: determinants of the time to exit},
  url          = {http://dx.doi.org/10.1007/s00191-010-0192-2},
  volume       = {21},
  year         = {2011},
}

Chicago
Balcaen, Sofie, Sophie Manigart, and Hubert Ooghe. 2011. “From Distress to Exit: Determinants of the Time to Exit.” Journal of Evolutionary Economics 21 (3): 407–446.
APA
Balcaen, S., Manigart, S., & Ooghe, H. (2011). From distress to exit: determinants of the time to exit. JOURNAL OF EVOLUTIONARY ECONOMICS, 21(3), 407–446.
Vancouver
1.
Balcaen S, Manigart S, Ooghe H. From distress to exit: determinants of the time to exit. JOURNAL OF EVOLUTIONARY ECONOMICS. 2011;21(3):407–46.
MLA
Balcaen, Sofie, Sophie Manigart, and Hubert Ooghe. “From Distress to Exit: Determinants of the Time to Exit.” JOURNAL OF EVOLUTIONARY ECONOMICS 21.3 (2011): 407–446. Print.