Title

The effect of changing firm characteristics on capacity to restructure

Date of this Version

1-1-2007

Document Type

Journal Article

Publication Details

Interim status: Citation only.

Routledge, J. & Gadenne, D. (2007). The effect of changing firm characteristics on capacity to restructure. International journal of business studies, 15(2), 25-36.

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2007 HERDC submission.

© Copyright International Journal of Business Studies, 2007.

Abstract

This paper examines whether changes in financial characteristics over the time prior to a firm entering insolvency administration will affect its reorganisation prospects. Prior research shows that an insolvent firm’s ability to rectify the mismatch between currently available liquid assets and current financial obligations is critical to the reorganisation outcome. Accordingly, a multivariate analysis of financial characteristics which reflect the firm’s ability to address this mismatch is presented. The results show that changes in operating performance and liquidity prior to a firm entering insolvency administration have a bearing on administration outcomes.

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This document has been peer reviewed.