Article history: Received 20 May 2009 Received in revised form 26 April 2010 Accepted 18 May 2010 Available online 26 June 2010 How do bankruptcy laws as formal institutions affect entrepreneurship development around the world? Do entrepreneur-friendly bankruptcy laws encourage more entrepreneurship development at a societal level? We posit that if bankrupt entrepreneurs are excessively punishe...

We develop a model of neural networks to study the bankruptcy of U.S. banks, taking into account the specific features of the recent financial crisis. We combine multilayer perceptrons and self-organizing maps to provide a tool that displays the probability of distress up to three years before bankruptcy occurs. Based on data from the Federal Deposit Insurance Corporation between 2002 and 2012,...

In this paper, we examine the levels of care which would be chosen by a monopolistic manufacturer and competitive retailer, when both the manufacturer and retailer can affect the probability of an accident and when the manufacturer cannot observe ex ante the care chosen by the retailer. We show that if retailer bankruptcy is not possible, retailer liability is superior to manufacturer liability...

This paper examines the reorganization process under Chapter 11 of the U.S. bankruptcy code. Our model considers two classes of creditors and accommodates several features of Chapter 11, including the intervention of the bankruptcy judge. We model the strategic interaction between claimants under Chapter 11 as a costly multiple-stage bargaining process, and solve it in a game theory setting. Us...

Closed exchange and production-and-exchange economies may have multiple equilibria, a fact that is usually ignored in macroeconomic models. Our basic argument is that default and bankruptcy laws are required to prevent strategic default, and these laws can also serve to provide the conditions for uniqueness. In this paper we report experimental evidence on the effectiveness of this approach to ...

The recent world financial crisis has increased the number of bankruptcies in numerous countries and has resulted in a new area of research which responds to the need to predict this phenomenon, not only at the level of individual countries, but also at a global level, offering explanations of the common characteristics shared by the affected companies. Nevertheless, few studies focus on the pr...

This paper is written for predicting Bankruptcy using different Machine Learning Algorithms. Whether the company will go bankrupt or not is one of the most challenging and toughest question to answer in the 21 st Century. Bankruptcy is defined as the final stage of failure for a firm. A company declares that it has gone bankrupt when at that present moment it does not have enough funds to pay t...

In this study, we conducted an empirical investigation of whether it is possible to rely on two versions of the Altman Model (1968) to predict financial failure of publicly traded companies in Israel between 2000 and 2007. The findings of the study indicated that given the sample and the study term, the preferable model for predicting financial failure of Israeli companies is the Ingbar version...

Article history: Received 17 January 2014 Received in revised form 28 May 2014 Accepted 29 May 2014 Available online 12 June 2014 This article investigates the impact of the observation that managers can use cash to defer bankruptcy on default risk and corporate financial policies. I show that with managerial cash use to defer default, the impact of cash on default risk depends on two opposing ...

In bankruptcy prediction, the proportion of events is very low, which is often oversampled to eliminate this bias. In this paper, we study the influence of the event rate on discrimination abilities of bankruptcy prediction models. First the statistical association and significance of public records and firmographics indicators with the bankruptcy were explored. Then the event rate was oversamp...