Modelling the impact of macroeconomic variables on aggregate corporate insolvency: case of Croatia
Journal Title: Economic Research-Ekonomska Istraživanja - Year 2016, Vol 29, Issue 1
Abstract
The majority of research papers dealing with corporate failure and insolvency in transition countries use a combination of financial ratios in investigating corporate failures, i.e., the microeconomic approach. By relying solely on the microeconomic approach, it is not possible to completely capture the complexity of business operations. In recent years, there has been a growing interest in exploring the predictive power of macroeconomic variables in forecasting insolvencies. As the macroeconomic approach has been applied mainly in the analysis of developed economies, this article investigates the influence of macroeconomic variables on aggregate corporate insolvency in Croatia, using the vector error-correction model (VECM) for the period 2000–2011. The results have shown a long-run dynamic connection between the corporate insolvency rate and the rate of unemployment while corporate credits, long-term interest rates and industrial production have a short-term effect on the corporate insolvency rate.
Authors and Affiliations
Ivana Tomas Žiković
Keywords
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- EP ID EP202960
- DOI 10.1080/1331677X.2016.1175727
- Views 37
- Downloads 0
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