Preliminary communication

The statistical assessment of financial distress risk in the case of metallurgical companies

Ch. B. Balan ; Faculty of Economics and Business Administration, “Alexandru Ioan Cuza” University of Iasi, Romania
I.-B. Robu ; Faculty of Economics and Business Administration, “Alexandru Ioan Cuza” University of Iasi, Romania
E. Jaba ; Faculty of Economics and Business Administration, “Alexandru Ioan Cuza” University of Iasi, Romania

Abstract

The erosion of both the position and the financial performance of companies usually occurs in times of financial crisis, leading to the incidence of the financial distress. The purpose of this study was twofold: firstly, to estimate the time-to-failure for companies in the metallurgic sector differentiated by sub-sectors and secondly, to estimate the influence of the factors that lead to the risk of financial distress. Survival analysis was applied with the aim to estimate the time-to-failure after the crisis and the influence of determinant factors on the financial distress risk. The results of this study were obtained on a sample of 248 companies. They showed that steel production sub-sector is the most sensitive to the occurrence of financial distress risk.

Keywords

metallurgic industry; financial distress risk; financial crisis; Kaplan-Meier method; Cox model

Hrčak ID:

131626

URI

https://hrcak.srce.hr/131626

Publication date:

1.7.2015.

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