Survival of financially distressed SMEs and out-of-court versus in-court reorganization: explanatory internal factors
The Directive (EU) 2019/1023 of 20th June 2019 on preventive restructuring frameworks, have highlighted the need to evaluate, the possibilities of restructuring insolvent companies, but viable in the future. Based on the Theory of Resources, this research aims to identify those internal factors that...
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| Format: | Article |
| Language: | English |
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Universidad de Murcia
2021-01-01
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| Series: | Revista de Contabilidad: Spanish Accounting Review |
| Subjects: | |
| Online Access: | https://revistas.um.es/rcsar/article/view/349891 |
| _version_ | 1798028335804055552 |
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| author | Montserrat Manzaneque Elena Merino Jesús Antonio Sánchez |
| author_facet | Montserrat Manzaneque Elena Merino Jesús Antonio Sánchez |
| author_sort | Montserrat Manzaneque |
| collection | DOAJ |
| description | The Directive (EU) 2019/1023 of 20th June 2019 on preventive restructuring frameworks, have highlighted the need to evaluate, the possibilities of restructuring insolvent companies, but viable in the future. Based on the Theory of Resources, this research aims to identify those internal factors that contribute to explain the differences in the outcome of failure SMEs. To do this, a sample of 6,285 Spanish SMEs that failed in the 2008-2010 period was used and the evolution of each of them during the 2011-2013 period is observed.
We have two aims: (1) to identify the internal differences influencing the path of reorganizations versus liquidation of failed SMEs, allowing a diagnosis of the firm´s economic and financial situation in order to prevent its disappearance; and (2) to recognize significantly internal differences between reorganized out-of-court and those reorganized in-court. Specifically, our results reveal that the ability of the firm to create value and to manage the receivable and working capital financial design and the level of historical slack contribute to understand the differences between SMEs that are able to overcome difficult situations and survive of those that are liquidated. In addition, our results also reveal that the level of assets and debts are the main difference between firms that opt for an out-of-court reorganization and those that follow a judicial reorganization process. |
| first_indexed | 2024-04-11T19:06:14Z |
| format | Article |
| id | doaj.art-5bfff78a98cb4d8eaac06cc15a68354c |
| institution | Directory Open Access Journal |
| issn | 1138-4891 1988-4672 |
| language | English |
| last_indexed | 2024-04-11T19:06:14Z |
| publishDate | 2021-01-01 |
| publisher | Universidad de Murcia |
| record_format | Article |
| series | Revista de Contabilidad: Spanish Accounting Review |
| spelling | doaj.art-5bfff78a98cb4d8eaac06cc15a68354c2022-12-22T04:07:46ZengUniversidad de MurciaRevista de Contabilidad: Spanish Accounting Review1138-48911988-46722021-01-0124110.6018/rcsar.349891Survival of financially distressed SMEs and out-of-court versus in-court reorganization: explanatory internal factorsMontserrat Manzaneque0Elena Merino1Jesús Antonio Sánchez2University of Castilla-La ManchaUniversity of Castilla-La ManchaUniversity of Castilla-La ManchaThe Directive (EU) 2019/1023 of 20th June 2019 on preventive restructuring frameworks, have highlighted the need to evaluate, the possibilities of restructuring insolvent companies, but viable in the future. Based on the Theory of Resources, this research aims to identify those internal factors that contribute to explain the differences in the outcome of failure SMEs. To do this, a sample of 6,285 Spanish SMEs that failed in the 2008-2010 period was used and the evolution of each of them during the 2011-2013 period is observed. We have two aims: (1) to identify the internal differences influencing the path of reorganizations versus liquidation of failed SMEs, allowing a diagnosis of the firm´s economic and financial situation in order to prevent its disappearance; and (2) to recognize significantly internal differences between reorganized out-of-court and those reorganized in-court. Specifically, our results reveal that the ability of the firm to create value and to manage the receivable and working capital financial design and the level of historical slack contribute to understand the differences between SMEs that are able to overcome difficult situations and survive of those that are liquidated. In addition, our results also reveal that the level of assets and debts are the main difference between firms that opt for an out-of-court reorganization and those that follow a judicial reorganization process.https://revistas.um.es/rcsar/article/view/349891SMEsliquidationfailurereorganizationout-of-court reorganizationin-court reorganization |
| spellingShingle | Montserrat Manzaneque Elena Merino Jesús Antonio Sánchez Survival of financially distressed SMEs and out-of-court versus in-court reorganization: explanatory internal factors Revista de Contabilidad: Spanish Accounting Review SMEs liquidation failure reorganization out-of-court reorganization in-court reorganization |
| title | Survival of financially distressed SMEs and out-of-court versus in-court reorganization: explanatory internal factors |
| title_full | Survival of financially distressed SMEs and out-of-court versus in-court reorganization: explanatory internal factors |
| title_fullStr | Survival of financially distressed SMEs and out-of-court versus in-court reorganization: explanatory internal factors |
| title_full_unstemmed | Survival of financially distressed SMEs and out-of-court versus in-court reorganization: explanatory internal factors |
| title_short | Survival of financially distressed SMEs and out-of-court versus in-court reorganization: explanatory internal factors |
| title_sort | survival of financially distressed smes and out of court versus in court reorganization explanatory internal factors |
| topic | SMEs liquidation failure reorganization out-of-court reorganization in-court reorganization |
| url | https://revistas.um.es/rcsar/article/view/349891 |
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