Discussion Papers no. 466

The influence of the business cycle on bankruptcy probability

I combine two fields of research on default prediction by empirically testing a bankruptcy prediction function where unlisted firms are evaluated on the basis of both their financial statement analysis and the macroeconomic environment. This combination is found to improve the default prediction compared to financial statements alone. The GDP-gap, a production index and the money supply M1 in combination with some financial health indicators for individual firms are found to be significant predictors on default for Norwegian firms during both a recovery and expansion in the 1990's.

Om publikasjonen

Tittel

The influence of the business cycle on bankruptcy probability

Ansvarlig

Suzan Hol

Serie og -nummer

Discussion Papers no. 466

Emne

Discussion Papers

Antall sider

29

Målform

Engelsk

Om Discussion Papers

Discussion papers comprise research papers intended for international journals and books. A preprint of a Discussion Paper may be longer and more elaborate than a standard journal article as it may include intermediate calculations, background material etc.

Kontakt