The Effect Of Financial Constraints On Firm Exit: Discriminating Among Alternative Exit Modes (original) (raw)

AI-generated Abstract

The paper investigates the impact of financial constraints on firm exit modes, particularly in the context of the financial crisis. It proposes a multi-dimensional instrument for measuring financial constraints, distinguishing between financially and economically distressed firms. The study employs exploratory factor analysis and multinomial logit/probit models on data from Slovenian firms, revealing that financial constraints significantly influence various exit decisions, including bankruptcy, voluntary liquidation, and mergers.