구조조정유형의 결정에 영향을 미치는 요인 = Financial Factors and Selections of Reorganization Types of Firms in Default

다국어 초록 (Multilingual Abstract)

There are two types of reorganization approaches in Korea. The one is composition(hwaeui) and the other is corporate reorganization(jeongri). A firm in default can select its reorganization approach and then apply for court permission, and the court determines the reorganization approaches for the firm. This study investigates the financial factors affecting the courts decision regarding the reorganization approach for each firm. The empirical analysis found the followings: First, firm size, financial status and audit opinion are major factors affecting the reorganization type choice. The hwaeui firms in general were relatively smaller in size, reported higher cash flows, and were issued better audit opinions than the Jeongri firms. Second, our statistical prediction model using some financial variables could predict the reorganization type choice of the Courts with the classification accuracy of 71%. Based on these empirical results, we recommend that the court should determine the reorganization type directly without reviewing each firm`s application for reorganization.