Sofie Balcaen - Academia.edu (original) (raw)

Papers by Sofie Balcaen

Research paper thumbnail of Are failure prediction models transferable from one country to another? An empirical study using financial statements

Faced with the question as to whether failure prediction models (multiple discriminant and logit ... more Faced with the question as to whether failure prediction models (multiple discriminant and logit analysis) from different countries can easily be transferred to other countries, this study examines the validity of a range of models on a dataset of Belgian company accounts, both when using the original and re-estimated coefficients. Firstly, contrary to expectations, models that show bad performance results

Research paper thumbnail of Are Failure Prediction Models Widely Usable? An Empirical Study Using a Belgian Dataset

Multinational Finance Journal, 2007

ABSTRACT Faced with the question as to whether failure prediction models can easily be transferre... more ABSTRACT Faced with the question as to whether failure prediction models can easily be transferred and applied to a new data setting, this study examines the performance of seven models on a dataset of Belgian company failures after re-estimation of the coefficients. The validation results indicate that some models are widely usable: they are strongly predictive when applied to the new data set. The Gloubos-Grammatikos models and Keasey-McGuinness appear among the best performing models, and also Ooghe-Joos-De Vos and Zavgren seem to be widely usable, respectively for failure prediction 1 and 3 years prior to failure. At the same time, the Altman and Bilderbeek models show very poor results when applied to the Belgian dataset. The best performing models seem to combine the right variables in an intuitively right sense and it appears that the combination of some types of variables generally leads to good predictive results. On the contrary, the estimation technique, complexity and number of variables do not explain the predictive performances (JEL: G33,M49).

Research paper thumbnail of Firm exit after distress: differentiating between bankruptcy, voluntary liquidation and M&A

Small Business Economics, 2012

This paper examines firm-level determinants of mature firm exits after economic distress. Using n... more This paper examines firm-level determinants of mature firm exits after economic distress. Using nested logit models and a sample of 6,118 distress-related exits in Belgium, we analyze the type of exit that distressed firms experience. We show that 41% of the firms in our sample exit through a court driven exit procedure (mainly bankruptcy), 44% are voluntarily liquidated and 14% are acquired, merged or split (hereafter M&A). Distressed firm exit follows two distinct stages. First, a firm either decides to exit voluntarily or is forced into bankruptcy, which is the least efficient exit strategy. Compared to bankruptcy, the probability of a voluntary exit increases with higher levels of cash, lower leverage, holding no secured debt and being embedded in a group. If a firm exits voluntarily, it enters a second stage and decides either to exit through voluntary liquidation or through a M&A. Conditional on not going bankrupt, the likelihood of voluntary liquidation compared to M&A increases with higher levels of cash or secured debt, with smaller size and with an absence of group relations. We contribute to the firm exit literature by jointly analyzing three exit types and showing that bankruptcy and voluntary liquidation are fundamentally different exit routes. While voluntary liquidation is an important exit route for distressed firms, most previous studies have failed to distinguish between bankruptcy and liquidation. We hence contribute to the exit literature by showing that bankruptcy, voluntary liquidation and M&A are fundamentally distinct exit routes for distressed firms, driven by different firm level characteristics and following a two-stage process.

Research paper thumbnail of From distress to exit: determinants of the time to exit

Journal of Evolutionary Economics, 2011

This paper analyses the duration of the time to exit of distressed firms, differentiating between... more This paper analyses the duration of the time to exit of distressed firms, differentiating between involuntary exits (mainly bankruptcies) and voluntary liquidations. It examines how long firms survive after initial signs of economic distress. The study is conducted on an extensive dataset of 5,233 Belgian distress-related exits of non-starting firms, the majority being privately held. The results highlight that slack resources have an opposite effect on the timing of involuntary exits and voluntary liquidations. On the one hand, high levels of available and potential slack increase the time to involuntary exit, as they allow distressed firms to postpone an impending involuntary exit. On the other hand, high available slack resources shorten the time to voluntary liquidation as they make voluntary liquidation easier. Further, a high level of stakeholder dependence increases the time to exit after distress, whether the firm exits through a voluntary or through an involuntary procedure. This is explained by the fact that stakeholder dependence increases the complexity of the exit decision and the exit procedure. 4

Research paper thumbnail of 35 years of studies on business failure: an overview of the classic statistical methodologies and their related problems

The British Accounting Review, 2006

Over the last 35 years, the topic of business failure prediction has developed to a major researc... more Over the last 35 years, the topic of business failure prediction has developed to a major research domain in corporate finance. A gigantic number of academic researchers from all over the world have been developing corporate failure prediction models, based on various modelling techniques. The 'classic cross-sectional statistical' methods have appeared to be most popular. Numerous 'single-period' or 'static' models have been developed, especially multivariate discriminant models and logit models.

Research paper thumbnail of Alternative methodologies in studies on business failure: do they produce better results than the classical statistical methods

Vlerick Leuven Gent Management School Working …, 2004

Over the last 35 years, the topic of company failure prediction has developed to a major research... more Over the last 35 years, the topic of company failure prediction has developed to a major research domain in corporate finance. Academic researchers from all over the world have been developing a gigantic number of corporate failure prediction models, based on various types of modelling techniques. Besides the classic cross-sectional statistical methods, which

Research paper thumbnail of 35 years of studies on business failure: an overview of the classical statistical methodologiesand their related problems

Over the last 35 years, the topic of business failure prediction has developed to a major researc... more Over the last 35 years, the topic of business failure prediction has developed to a major research domain in corporate finance. A gigantic number of academic researchers from all over the world have been developing corporate failure prediction models, based on various modelling techniques. The ‘classical cross-sectional statistical’ methods have appeared to be most popular. Numerous ‘singleperiod’ or ‘static’ models

Research paper thumbnail of Financial distress and firm exit: determinants of involuntary exits, voluntary liquidations and restructuring exits

This paper provides new insights on the determinants of firm exit after distress. Using nested lo... more This paper provides new insights on the determinants of firm exit after distress. Using nested logit models and a sample of 6118 distress-related exits from Belgium, we analyze the impacts of available and potential slack and the relative efficiency of voluntary liquidation, compared to acquisition and merger, on the type of exit. It appears essential to examine the type of

Research paper thumbnail of Are failure prediction models transferable from one country to another? An empirical study using financial statements

Faced with the question as to whether failure prediction models (multiple discriminant and logit ... more Faced with the question as to whether failure prediction models (multiple discriminant and logit analysis) from different countries can easily be transferred to other countries, this study examines the validity of a range of models on a dataset of Belgian company accounts, both when using the original and re-estimated coefficients. Firstly, contrary to expectations, models that show bad performance results

Research paper thumbnail of Are Failure Prediction Models Widely Usable? An Empirical Study Using a Belgian Dataset

Multinational Finance Journal, 2007

ABSTRACT Faced with the question as to whether failure prediction models can easily be transferre... more ABSTRACT Faced with the question as to whether failure prediction models can easily be transferred and applied to a new data setting, this study examines the performance of seven models on a dataset of Belgian company failures after re-estimation of the coefficients. The validation results indicate that some models are widely usable: they are strongly predictive when applied to the new data set. The Gloubos-Grammatikos models and Keasey-McGuinness appear among the best performing models, and also Ooghe-Joos-De Vos and Zavgren seem to be widely usable, respectively for failure prediction 1 and 3 years prior to failure. At the same time, the Altman and Bilderbeek models show very poor results when applied to the Belgian dataset. The best performing models seem to combine the right variables in an intuitively right sense and it appears that the combination of some types of variables generally leads to good predictive results. On the contrary, the estimation technique, complexity and number of variables do not explain the predictive performances (JEL: G33,M49).

Research paper thumbnail of Firm exit after distress: differentiating between bankruptcy, voluntary liquidation and M&A

Small Business Economics, 2012

This paper examines firm-level determinants of mature firm exits after economic distress. Using n... more This paper examines firm-level determinants of mature firm exits after economic distress. Using nested logit models and a sample of 6,118 distress-related exits in Belgium, we analyze the type of exit that distressed firms experience. We show that 41% of the firms in our sample exit through a court driven exit procedure (mainly bankruptcy), 44% are voluntarily liquidated and 14% are acquired, merged or split (hereafter M&A). Distressed firm exit follows two distinct stages. First, a firm either decides to exit voluntarily or is forced into bankruptcy, which is the least efficient exit strategy. Compared to bankruptcy, the probability of a voluntary exit increases with higher levels of cash, lower leverage, holding no secured debt and being embedded in a group. If a firm exits voluntarily, it enters a second stage and decides either to exit through voluntary liquidation or through a M&A. Conditional on not going bankrupt, the likelihood of voluntary liquidation compared to M&A increases with higher levels of cash or secured debt, with smaller size and with an absence of group relations. We contribute to the firm exit literature by jointly analyzing three exit types and showing that bankruptcy and voluntary liquidation are fundamentally different exit routes. While voluntary liquidation is an important exit route for distressed firms, most previous studies have failed to distinguish between bankruptcy and liquidation. We hence contribute to the exit literature by showing that bankruptcy, voluntary liquidation and M&A are fundamentally distinct exit routes for distressed firms, driven by different firm level characteristics and following a two-stage process.

Research paper thumbnail of From distress to exit: determinants of the time to exit

Journal of Evolutionary Economics, 2011

This paper analyses the duration of the time to exit of distressed firms, differentiating between... more This paper analyses the duration of the time to exit of distressed firms, differentiating between involuntary exits (mainly bankruptcies) and voluntary liquidations. It examines how long firms survive after initial signs of economic distress. The study is conducted on an extensive dataset of 5,233 Belgian distress-related exits of non-starting firms, the majority being privately held. The results highlight that slack resources have an opposite effect on the timing of involuntary exits and voluntary liquidations. On the one hand, high levels of available and potential slack increase the time to involuntary exit, as they allow distressed firms to postpone an impending involuntary exit. On the other hand, high available slack resources shorten the time to voluntary liquidation as they make voluntary liquidation easier. Further, a high level of stakeholder dependence increases the time to exit after distress, whether the firm exits through a voluntary or through an involuntary procedure. This is explained by the fact that stakeholder dependence increases the complexity of the exit decision and the exit procedure. 4

Research paper thumbnail of 35 years of studies on business failure: an overview of the classic statistical methodologies and their related problems

The British Accounting Review, 2006

Over the last 35 years, the topic of business failure prediction has developed to a major researc... more Over the last 35 years, the topic of business failure prediction has developed to a major research domain in corporate finance. A gigantic number of academic researchers from all over the world have been developing corporate failure prediction models, based on various modelling techniques. The 'classic cross-sectional statistical' methods have appeared to be most popular. Numerous 'single-period' or 'static' models have been developed, especially multivariate discriminant models and logit models.

Research paper thumbnail of Alternative methodologies in studies on business failure: do they produce better results than the classical statistical methods?

Over the last 35 years, the topic of company failure prediction has developed to a major research... more Over the last 35 years, the topic of company failure prediction has developed to a major research domain in corporate finance. Academic researchers from all over the world have been developing a gigantic number of corporate failure prediction models, based on various types of modelling techniques. Besides the classical cross-sectional statistical methods, which have produced numerous failure prediction models, researchers

Research paper thumbnail of The Ooghe-Joos-De Vos failure prédiction models: a cross-industry validation

This study compares the predictive performances of the Ooghe-Joos-De Vos models across different ... more This study compares the predictive performances of the Ooghe-Joos-De Vos models across different industries and subgroups concerning size-class and annual accounts form. Type I, type II and unweighted error rates, Gini-coefficients and trade-off functions are analysed. The results indicate a wide variety of performances for the different subgroups. Firstly, both OJD models seem to perform best for the classical manufacturing

Research paper thumbnail of Are failure prediction models transferable from one country to another? An empirical study using financial statements

Faced with the question as to whether failure prediction models (multiple discriminant and logit ... more Faced with the question as to whether failure prediction models (multiple discriminant and logit analysis) from different countries can easily be transferred to other countries, this study examines the validity of a range of models on a dataset of Belgian company accounts, both when using the original and re-estimated coefficients. Firstly, contrary to expectations, models that show bad performance results

Research paper thumbnail of Are Failure Prediction Models Widely Usable? An Empirical Study Using a Belgian Dataset

Multinational Finance Journal, 2007

ABSTRACT Faced with the question as to whether failure prediction models can easily be transferre... more ABSTRACT Faced with the question as to whether failure prediction models can easily be transferred and applied to a new data setting, this study examines the performance of seven models on a dataset of Belgian company failures after re-estimation of the coefficients. The validation results indicate that some models are widely usable: they are strongly predictive when applied to the new data set. The Gloubos-Grammatikos models and Keasey-McGuinness appear among the best performing models, and also Ooghe-Joos-De Vos and Zavgren seem to be widely usable, respectively for failure prediction 1 and 3 years prior to failure. At the same time, the Altman and Bilderbeek models show very poor results when applied to the Belgian dataset. The best performing models seem to combine the right variables in an intuitively right sense and it appears that the combination of some types of variables generally leads to good predictive results. On the contrary, the estimation technique, complexity and number of variables do not explain the predictive performances (JEL: G33,M49).

Research paper thumbnail of Firm exit after distress: differentiating between bankruptcy, voluntary liquidation and M&A

Small Business Economics, 2012

This paper examines firm-level determinants of mature firm exits after economic distress. Using n... more This paper examines firm-level determinants of mature firm exits after economic distress. Using nested logit models and a sample of 6,118 distress-related exits in Belgium, we analyze the type of exit that distressed firms experience. We show that 41% of the firms in our sample exit through a court driven exit procedure (mainly bankruptcy), 44% are voluntarily liquidated and 14% are acquired, merged or split (hereafter M&A). Distressed firm exit follows two distinct stages. First, a firm either decides to exit voluntarily or is forced into bankruptcy, which is the least efficient exit strategy. Compared to bankruptcy, the probability of a voluntary exit increases with higher levels of cash, lower leverage, holding no secured debt and being embedded in a group. If a firm exits voluntarily, it enters a second stage and decides either to exit through voluntary liquidation or through a M&A. Conditional on not going bankrupt, the likelihood of voluntary liquidation compared to M&A increases with higher levels of cash or secured debt, with smaller size and with an absence of group relations. We contribute to the firm exit literature by jointly analyzing three exit types and showing that bankruptcy and voluntary liquidation are fundamentally different exit routes. While voluntary liquidation is an important exit route for distressed firms, most previous studies have failed to distinguish between bankruptcy and liquidation. We hence contribute to the exit literature by showing that bankruptcy, voluntary liquidation and M&A are fundamentally distinct exit routes for distressed firms, driven by different firm level characteristics and following a two-stage process.

Research paper thumbnail of From distress to exit: determinants of the time to exit

Journal of Evolutionary Economics, 2011

This paper analyses the duration of the time to exit of distressed firms, differentiating between... more This paper analyses the duration of the time to exit of distressed firms, differentiating between involuntary exits (mainly bankruptcies) and voluntary liquidations. It examines how long firms survive after initial signs of economic distress. The study is conducted on an extensive dataset of 5,233 Belgian distress-related exits of non-starting firms, the majority being privately held. The results highlight that slack resources have an opposite effect on the timing of involuntary exits and voluntary liquidations. On the one hand, high levels of available and potential slack increase the time to involuntary exit, as they allow distressed firms to postpone an impending involuntary exit. On the other hand, high available slack resources shorten the time to voluntary liquidation as they make voluntary liquidation easier. Further, a high level of stakeholder dependence increases the time to exit after distress, whether the firm exits through a voluntary or through an involuntary procedure. This is explained by the fact that stakeholder dependence increases the complexity of the exit decision and the exit procedure. 4

Research paper thumbnail of 35 years of studies on business failure: an overview of the classic statistical methodologies and their related problems

The British Accounting Review, 2006

Over the last 35 years, the topic of business failure prediction has developed to a major researc... more Over the last 35 years, the topic of business failure prediction has developed to a major research domain in corporate finance. A gigantic number of academic researchers from all over the world have been developing corporate failure prediction models, based on various modelling techniques. The 'classic cross-sectional statistical' methods have appeared to be most popular. Numerous 'single-period' or 'static' models have been developed, especially multivariate discriminant models and logit models.

Research paper thumbnail of Alternative methodologies in studies on business failure: do they produce better results than the classical statistical methods

Vlerick Leuven Gent Management School Working …, 2004

Over the last 35 years, the topic of company failure prediction has developed to a major research... more Over the last 35 years, the topic of company failure prediction has developed to a major research domain in corporate finance. Academic researchers from all over the world have been developing a gigantic number of corporate failure prediction models, based on various types of modelling techniques. Besides the classic cross-sectional statistical methods, which

Research paper thumbnail of 35 years of studies on business failure: an overview of the classical statistical methodologiesand their related problems

Over the last 35 years, the topic of business failure prediction has developed to a major researc... more Over the last 35 years, the topic of business failure prediction has developed to a major research domain in corporate finance. A gigantic number of academic researchers from all over the world have been developing corporate failure prediction models, based on various modelling techniques. The ‘classical cross-sectional statistical’ methods have appeared to be most popular. Numerous ‘singleperiod’ or ‘static’ models

Research paper thumbnail of Financial distress and firm exit: determinants of involuntary exits, voluntary liquidations and restructuring exits

This paper provides new insights on the determinants of firm exit after distress. Using nested lo... more This paper provides new insights on the determinants of firm exit after distress. Using nested logit models and a sample of 6118 distress-related exits from Belgium, we analyze the impacts of available and potential slack and the relative efficiency of voluntary liquidation, compared to acquisition and merger, on the type of exit. It appears essential to examine the type of

Research paper thumbnail of Are failure prediction models transferable from one country to another? An empirical study using financial statements

Faced with the question as to whether failure prediction models (multiple discriminant and logit ... more Faced with the question as to whether failure prediction models (multiple discriminant and logit analysis) from different countries can easily be transferred to other countries, this study examines the validity of a range of models on a dataset of Belgian company accounts, both when using the original and re-estimated coefficients. Firstly, contrary to expectations, models that show bad performance results

Research paper thumbnail of Are Failure Prediction Models Widely Usable? An Empirical Study Using a Belgian Dataset

Multinational Finance Journal, 2007

ABSTRACT Faced with the question as to whether failure prediction models can easily be transferre... more ABSTRACT Faced with the question as to whether failure prediction models can easily be transferred and applied to a new data setting, this study examines the performance of seven models on a dataset of Belgian company failures after re-estimation of the coefficients. The validation results indicate that some models are widely usable: they are strongly predictive when applied to the new data set. The Gloubos-Grammatikos models and Keasey-McGuinness appear among the best performing models, and also Ooghe-Joos-De Vos and Zavgren seem to be widely usable, respectively for failure prediction 1 and 3 years prior to failure. At the same time, the Altman and Bilderbeek models show very poor results when applied to the Belgian dataset. The best performing models seem to combine the right variables in an intuitively right sense and it appears that the combination of some types of variables generally leads to good predictive results. On the contrary, the estimation technique, complexity and number of variables do not explain the predictive performances (JEL: G33,M49).

Research paper thumbnail of Firm exit after distress: differentiating between bankruptcy, voluntary liquidation and M&A

Small Business Economics, 2012

This paper examines firm-level determinants of mature firm exits after economic distress. Using n... more This paper examines firm-level determinants of mature firm exits after economic distress. Using nested logit models and a sample of 6,118 distress-related exits in Belgium, we analyze the type of exit that distressed firms experience. We show that 41% of the firms in our sample exit through a court driven exit procedure (mainly bankruptcy), 44% are voluntarily liquidated and 14% are acquired, merged or split (hereafter M&A). Distressed firm exit follows two distinct stages. First, a firm either decides to exit voluntarily or is forced into bankruptcy, which is the least efficient exit strategy. Compared to bankruptcy, the probability of a voluntary exit increases with higher levels of cash, lower leverage, holding no secured debt and being embedded in a group. If a firm exits voluntarily, it enters a second stage and decides either to exit through voluntary liquidation or through a M&A. Conditional on not going bankrupt, the likelihood of voluntary liquidation compared to M&A increases with higher levels of cash or secured debt, with smaller size and with an absence of group relations. We contribute to the firm exit literature by jointly analyzing three exit types and showing that bankruptcy and voluntary liquidation are fundamentally different exit routes. While voluntary liquidation is an important exit route for distressed firms, most previous studies have failed to distinguish between bankruptcy and liquidation. We hence contribute to the exit literature by showing that bankruptcy, voluntary liquidation and M&A are fundamentally distinct exit routes for distressed firms, driven by different firm level characteristics and following a two-stage process.

Research paper thumbnail of From distress to exit: determinants of the time to exit

Journal of Evolutionary Economics, 2011

This paper analyses the duration of the time to exit of distressed firms, differentiating between... more This paper analyses the duration of the time to exit of distressed firms, differentiating between involuntary exits (mainly bankruptcies) and voluntary liquidations. It examines how long firms survive after initial signs of economic distress. The study is conducted on an extensive dataset of 5,233 Belgian distress-related exits of non-starting firms, the majority being privately held. The results highlight that slack resources have an opposite effect on the timing of involuntary exits and voluntary liquidations. On the one hand, high levels of available and potential slack increase the time to involuntary exit, as they allow distressed firms to postpone an impending involuntary exit. On the other hand, high available slack resources shorten the time to voluntary liquidation as they make voluntary liquidation easier. Further, a high level of stakeholder dependence increases the time to exit after distress, whether the firm exits through a voluntary or through an involuntary procedure. This is explained by the fact that stakeholder dependence increases the complexity of the exit decision and the exit procedure. 4

Research paper thumbnail of 35 years of studies on business failure: an overview of the classic statistical methodologies and their related problems

The British Accounting Review, 2006

Over the last 35 years, the topic of business failure prediction has developed to a major researc... more Over the last 35 years, the topic of business failure prediction has developed to a major research domain in corporate finance. A gigantic number of academic researchers from all over the world have been developing corporate failure prediction models, based on various modelling techniques. The 'classic cross-sectional statistical' methods have appeared to be most popular. Numerous 'single-period' or 'static' models have been developed, especially multivariate discriminant models and logit models.

Research paper thumbnail of Alternative methodologies in studies on business failure: do they produce better results than the classical statistical methods?

Over the last 35 years, the topic of company failure prediction has developed to a major research... more Over the last 35 years, the topic of company failure prediction has developed to a major research domain in corporate finance. Academic researchers from all over the world have been developing a gigantic number of corporate failure prediction models, based on various types of modelling techniques. Besides the classical cross-sectional statistical methods, which have produced numerous failure prediction models, researchers

Research paper thumbnail of The Ooghe-Joos-De Vos failure prédiction models: a cross-industry validation

This study compares the predictive performances of the Ooghe-Joos-De Vos models across different ... more This study compares the predictive performances of the Ooghe-Joos-De Vos models across different industries and subgroups concerning size-class and annual accounts form. Type I, type II and unweighted error rates, Gini-coefficients and trade-off functions are analysed. The results indicate a wide variety of performances for the different subgroups. Firstly, both OJD models seem to perform best for the classical manufacturing