Original scientific paper
https://doi.org/10.1080/1331677X.2016.1175727
Modelling the impact of macroeconomic variables on aggregate corporate insolvency: case of Croatia
Ivana Tomas Žiković
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.
Keywords
Corporate insolvency; macroeconomic variables; vector error-correction model (VECM)
Hrčak ID:
171739
URI
Publication date:
22.12.2016.
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