Exploring Corporate Bankruptcy in Belgian Private Firms

Abstract

The main purpose of this paper is to identify the financial antecedents of corporate bankruptcy by employing a robust variable selection procedure. Based on a sample of 1,338 Belgian private firms, a backward stepwise logistic regression technique is employed. The findings indicate that the likelihood of corporate bankruptcy is higher at lower levels of solvency, liquidity and profitability. Furthermore, our results reveal that corporate bankruptcy is more likely in older and larger firms.