Managing Financial Distress: Insight into the Dynamics of Insolvency Proceedings and Retrenchment in Small Businesses - Archive ouverte HAL
Communication Dans Un Congrès Année : 2024

Managing Financial Distress: Insight into the Dynamics of Insolvency Proceedings and Retrenchment in Small Businesses

Résumé

This study delves into the complex landscape of business restructuring, focusing on the significant challenges posed by bankruptcy, particularly for small and medium-sized enterprises (SMEs). Retrenchment, a crucial strategy in existing literature, involves costcutting measures and employee downsizing, while insolvency proceedings provide a legal avenue for comprehensive financial restructuring. Using a bivariate probit model, our Analysis explores the interdependence of these strategies and their impact on firm survival. Drawing on a dataset from firms in the Rhône-Alpes region, the study reveals consistent negative associations between sales, profitability, and availability with the initiation of both insolvency proceedings and retrenchment. Supplier liabilities, on the other hand, exhibit a positive association with both strategies. The Analysis identifies shared explanatory variables, confirming the correlation between insolvency proceedings and retrenchment. Moreover, the study unravels a reciprocal causal relationship between these strategies, providing valuable insights for navigating the intricate landscape of business restructuring.
Fichier non déposé

Dates et versions

hal-04721041 , version 1 (04-10-2024)

Identifiants

  • HAL Id : hal-04721041 , version 1

Citer

Rachid Achbah. Managing Financial Distress: Insight into the Dynamics of Insolvency Proceedings and Retrenchment in Small Businesses. XXXIII conférence de l’AIMS, ESG UQAM, Jun 2024, Montréal (Québec), Canada. ⟨hal-04721041⟩
3 Consultations
0 Téléchargements

Partager

More