This paper examines determinants of corporate bankruptcy for Korean firms for the period of 2006 to 2008 immediately after the outbreak of the global financial crisis. We use the t-test and the ANOVA analysis. In addition, we employ a LOGIT model usin...
This paper examines determinants of corporate bankruptcy for Korean firms for the period of 2006 to 2008 immediately after the outbreak of the global financial crisis. We use the t-test and the ANOVA analysis. In addition, we employ a LOGIT model using pooled data and AUROC (Area Under Receiver Operator Characteristic) to determine the predictive power of the model The findings are that the commonly used ratio in bankruptcy models is statistically insignificant and nine variables including capital adequacy ratio, current ratio, quick ratio and others appear to have explanatory power for the probability of bankruptcy.