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| Tekijä: | Bhattacharjee, A. (et al.) |
| Otsikko: | Macroeconomic instability and business exit: Determinants of failures and acquisitions of UK firms |
| Lehti: | Economica
2009 : FEB, VOL. 76:301, p. 108-131 |
| Asiasana: | macroeconomics bankruptcy business cycles companies United Kingdom |
| Vapaa asiasana: | acquisitions |
| Kieli: | eng |
| Tiivistelmä: | This paper examines the impact of the macroeconomic environment on business exit in a world where acquisitions and bankruptcy are co-determined. This study uses data on UK quoted firms spanning a 38-year period that witnessed several business cycles to estimate competing risk hazard regression models. It is found that the processes determining bankruptcies and acquisitions depend on the macroeconomic environment. Macroeconomic instability has opposing effects on bankruptcy hazard and acquisition hazard, raising the former and lowering the latter. Bankruptcy hazard is counter-cyclical whereas acquisition hazard is pro-cyclical. In conclusion, US business cycle is a better predictor than the UK cycle itself. |
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