| Author: | Ward, T. J. Foster, B. P. |
| Title: | A note on selecting a response measure for financial distress |
| Journal: | Journal of Business Finance and Accounting
1997 : JUL, VOL. 24:6, p. 869-879 |
| Index terms: | FINANCIAL REPORTING FINANCIAL CRISES RESPONSE RATE MEASUREMENT |
| Language: | eng |
| Abstract: | Researchers have investigated financial distress prediction models to determine the usefulness of accounting information to lenders by using primarily legal bankruptcy as the response variable for economic financial distress. This paper uses a loan default/accommodation response variable as a proxy for the inability to pay debts when due. The study tests empirically whether or not using the inability of a firm to pay debts when due, loan default/accommodation, as a response measure produces different results than using legal bankruptcy as the respond measure. |
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