Persistence of collective memory of corporate bankruptcy events discussed on X (Twitter) is influenced by pre-bankruptcy public attention

Collective attention and memory involving significant events can be quantitatively studied via social media data. Previous studies analyzed user attention to discrete events that do not change post-event, and assume universal public attention patterns. However, dynamic events with ongoing updates are common, yielding varied individual attention patterns. We explore memory of U.S. companies filing Chapter 11 bankruptcy and being mentioned on X (formerly Twitter). Unlike discrete events, Chapter 11 entails ongoing financial changes as the company typically remains operational, influencing post-event attention dynamics. We collected 248,936 X mentions for 74 companies before and after each bankruptcy. Attention surged after bankruptcy, with distinct Low and High persistence levels compared with pre-bankruptcy attention. The two tweeting patterns were modeled using biexponential models, successfully predicting (F1-score: 0.81) post-bankruptcy attention persistence. Studying bankruptcy events on social media reveals diverse attention patterns, demonstrates how pre-bankruptcy attention affects post-bankruptcy recollection, and provides insights into memory of dynamic events.

Unravelling trends, patterns and intellectual structure of research on bankruptcy in SMEs: A bibliometric assessment and visualisation

Despite the burgeoning interest among academics in investigating the factors contributing to the high business failure rate among SMEs (small and medium-sized enterprises), the systematic synthesis of the literature on bankruptcy in SMEs is restricted. This article aims to significantly advance the understanding of the causes and repercussions of bankruptcy in SMEs and the preventative actions that may be taken to avoid it. This review assesses 282 articles from 175 outlets employing quantitative and statistics-based bibliometric tools. This bibliometric assessment helped delineate the citation and publication trends and the top contributors to the domain. The underlying thematic clusters of research on bankruptcy in SMEs were also identified, deciphered and elaborated, along with charting the future research vistas through the lens of theory, context, and methods framework. The authors believe this bibliometric variant of systematic literature review makes a significant contribution to bankruptcy and SME research by highlighting the development of the literature and some of the most active research fronts in the domain by offering insights that were not clasped thoroughly or assessed by prior literature assessments.

River water quality management using an integrated multi-objective optimization-simulation approach based on bankruptcy rules

The aim of this research is to allocate the river's self-purification (acceptance capacity of pollution) fairly between the beneficiaries (pollutant sources) using bankruptcy theory. For this purpose, four bankruptcy rules (CAE, CEL, P, and TAL) were called using the link of the water quality simulation model (QULA2Kw) to an evolutionary optimization algorithm (multi-objective imperialist competition algorithm (MOICA)). The objective functions were reducing polluters' wastewater treatment costs and preventing biochemical oxygen demand (BOD) violations of the standard level along the river. The applicability of the approach is demonstrated by the case study that was carried out on the Dez River in Iran. According to the results, the CEL scenario is the most effective method for the Dez River when taking into account the most optimal state for both objective functions (selecting the best compromise solution from the Pareto front). This is because it has the lowest violation value of the standard level for BOD along the river when compared to other scenarios. Alternatively, when considering Solution 20, which focuses on the maximum cost of treating the polluters while staying within the acceptable level of pollution in the river, the results indicated that the CEA rule emerged as the most favorable option. This is due to its lower treatment cost (156.9 (1000$)) and higher pollution discharge to the river (681.91 g/s).

SME viability in the COVID-19 recovery

Abstract

Using survey data from a representative sample of Irish Small and Medium Enterprises (SMEs), we study how firms are likely to perform under macroeconomic forecasts of the pandemic recovery. The rate of financial distress among firms is expected to fall under baseline forecasts from a peak of 12% in 2020 to 7% by 2024. We find that those firms that struggle to recover by the end of our scenario window were mostly unprofitable or distressed prior to the pandemic. Beyond our baseline case, we further model three alternative recovery scenarios to study the effect of fiscal support tapering, a partial recovery due to structural change in sectoral demand, and a financing gap driven by credit risk retrenchment by lenders. Our findings highlight the continued importance of "bridging" liquidity finance provision to ensure the long-term solvency of viable firms.

Plain English Summary

What proportion of SMEs are financially unviable in the post-pandemic economy? We study data from a representation sample of Irish SMEs and consider how they will perform under forecasts of the pandemic recovery. In our baseline scenario, we estimate that 7% of firms will remain distressed by 2024 and we find that most of these firms were unprofitable or already distressed prior to the pandemic. We look at a number of alternative macroeconomic scenarios, including where government supports are withdrawn, firms in some sectors do not fully recover, and where lenders lower the amount of money they are willing to extend to loan applicants. The impact of government support tapering alone is expected to be modest, and a partial recovery for some firms is not expected to raise aggregate distress by a sizeable amount. However, a sharp contraction in lending to otherwise viable firms leads to a significantly heightened distress rate. Policy measures that seek to support liquidity finance provision to viable firms will continue to have a role in the pandemic recovery.

Supporting SMEs during COVID-19: The case for targeted equity injections

We analyze the potential role of equity injections in addressing solvency risks among small and medium-sized enterprises (SMEs) after the COVID-19 crisis. Building on firm-level balance sheet projections for a sample of European economies, we simulate selected policy interventions and find that equity injections are quite effective at dampening the rise in insolvencies. Cost effectiveness requires careful targeting, however; under an illustrative scenario, leaving aside any costs arising from imperfect information and implementation, the cost of a program targeting only those SMEs worth saving is just a tenth of the cost of an untargeted approach directed to all insolvent firms. Overall, our paper provides a case for governments to rely more on targeted equity injections in responding to major shocks that trigger mass solvency risks.

Resolution of corporate insolvency during COVID-19 pandemic. Evidence from France

We investigate how the lockdown enforcement by French authorities is associated with the resolution of corporate insolvency. In this sense, we make a distinction between four legal procedures, namely the amicable liquidation (out-of-court exit), the judicial liquidation (court-driven exit), the restructuring procedure available to non-defaulted firms, and the restructuring procedure available to defaulted firms. Using a sample of 3488 non-listed and non-financial French firms, our estimates yield three major findings. First, the likelihood of judicial liquidation increased after the lifting of the quarantines compared to the pre-pandemic period. Second, the non-defaulted firms had a higher likelihood to reorganize in court during the second lockdown. Third, the lifting of the first lockdown led to a decrease in the probability of restructuring the assets of defaulted firms. Although the main objective of the lockdown was to limit spread of the virus, its enforcement has not encouraged the use of the out-of-court exit path.

Vulnerability and resilience of the road transport industry in Poland to the COVID-19 pandemic crisis

The research aims to examine the vulnerability and resilience of road transport enterprises in Poland to a crisis caused by the COVID-19 pandemic. In theory, we refer to the Schumpeterian perspective of creative destruction. In the empirical analysis, survey data on 500 transport companies randomly selected from the database were used. We estimated partial proportional odds models to show the factors responsible for the enterprises' vulnerability and resilience to unforeseen shock. The perspective refers to the total sample size and the division into two subgroups: micro and small and medium enterprises. To justify the results, we calculated a set of statistical indicators and tests. These models enable separating enterprises according to the vulnerability level. Transport enterprises occurred significantly vulnerable to the COVID-19 crisis, particularly the demand shock. The only factor that influenced resilience was the decrease in fuel prices, which allowed a cost reduction. The crisis showed that government aid was helpful in the short run, particularly for micro and small enterprises. The medium-sized enterprises were more resilient than micro and small ones. We formulated several recommendations to help transport enterprises to adjust in the medium term.

Predictors of Financial Distress Among Private U.S. Hospitals

BACKGROUND

Hospitals are closing after poor financial performance leaving many patients without access to medical care. Identifying the factors associated with financial distress offers hospitals avenues for potential intervention to avoid bankruptcy and closure.

MATERIALS AND METHODS

We performed a retrospective analysis of private U.S. hospitals' financial information from 2011 to 2018. A mixed effects logistic regression model was used with the primary outcome of hospital financial distress (based on the Altman Z-score).

RESULTS

Our sample included 2,720 private hospitals contributing a total of 20,022 hospital-year observations. The proportion of hospitals experiencing financial distress each year ranged from 22.0% to 24.3%. For-profit status was associated with an increased odds of financial distress (adjusted odds ratio (aOR), 4.36 [95% Confidence Interval (CI) 3.05 - 6.24]) as compared to non-profit status. A higher share of hospital revenue from Medicaid was also associated with increased odds of financial distress (aOR for the highest quartile, 2.28 [95% CI 1.73 - 3.00]) as compared to the lowest quartile. A higher case mix index (aOR for the highest quartile, 0.32 [95% CI 0.23 - 0.46]) and an increased share of hospital revenue from outpatient services (aOR for the highest quartile, 0.34 [95% CI 0.23 - 0.49]) were associated with decreased odds of financial distress as compared to their respective lowest quartiles.

CONCLUSIONS

A significant proportion of private U.S. hospitals experience financial distress. Increasing case complexity and the proportion of patient revenue from outpatient services may represent avenues to avoid financial distress.

Does patenting always help new firm survival? Understanding heterogeneity among exit routes

Abstract

While patents are a valuable resource ensuring the competitive advantage of firms, there is limited evidence on the role of patents in the survival and exit strategies of new firms. To fill the gap in the literature, we examine whether the effects of patenting on new firm survival vary according to exit routes (bankruptcy, merger, and voluntary liquidation), while considering the endogeneity of patenting. We use a large-scale sample of new firms in the Japanese manufacturing and information services sectors for the period 2003-2013. The findings indicate that new firms with a higher stock of patents are less likely to go bankrupt. Conversely, new firms with a higher stock of patents are more likely to exit via merger. These findings are consistent, regardless of whether patent stock is measured based on the patent applications or granted patents. Furthermore, we provide evidence that new firms with a higher stock of granted patents are more likely to voluntarily liquidate their businesses.

Plain English Summary

Can new firms enjoy a "patent premium" in terms of survival and exit outcomes? The findings of this study indicate that (1) patenting reduces the risk of bankruptcy, and (2) it increases the odds of exit via merger and voluntary liquidation. On the one hand, patenting ensures that new firms obtain competitive advantages, and thus, survive in the product market. On the other hand, it enables new firms to pursue successful exit strategies in the markets for ideas. This study concludes that new firms can enjoy a patent premium in terms of survival and exit outcomes. In promoting sustainable economic growth via entrepreneurship, policymakers need to shift their focus from creating more firms to creating innovative firms.

Rethinking SME default prediction: a systematic literature review and future perspectives

Over the last dozen years, the topic of small and medium enterprise (SME) default prediction has developed into a relevant research domain that has grown for important reasons exponentially across multiple disciplines, including finance, management, accounting, and statistics. Motivated by the enormous toll on SMEs caused by the 2007–2009 global financial crisis as well as the recent COVID-19 crisis and the consequent need to develop new SME default predictors, this paper provides a systematic literature review, based on a statistical, bibliometric analysis, of over 100 peer-reviewed articles published on SME default prediction modelling over a 34-year period, 1986 to 2019. We identified, analysed and reviewed five streams of research and suggest a set of future research avenues to help scholars and practitioners address the new challenges and emerging issues in a changing economic environment. The research agenda proposes some new innovative approaches to capture and exploit new data sources using modern analytical techniques, like artificial intelligence, machine learning, and macro-data inputs, with the aim of providing enhanced predictive results.

Obesity and bankruptcy: Evidence from US counties

Using annual county-level data on nonbusiness bankruptcy for the period 2005-2017 and obesity for the period 2004-2016, this paper finds that higher obesity rates are associated with higher bankruptcy rates beyond what can be explained by local economic conditions and demographic characteristics, state-specific economic shocks, and county-specific time trends. The magnitude suggests that a one-percentage point increase in the obesity rate is associated with a 0.02-0.03 increase (or a 1.0 percent increase) in Chapter 7 bankruptcy rates per 1000 residents and a 0.02-0.04 increase (or a 3-4 percent increase) in Chapter 13 bankruptcy rates per 1000 residents.

Small- and medium-enterprises bankruptcy dataset

Bankruptcy prediction is a long-standing issue that receives significant attention of academic researchers and industry practitioners. Most of the papers on bankruptcy prediction focus on companies that are listed on the stock market, and there are only limited data for the rest of the companies. These companies, not indexed at any stock market, represent a significant part of the economy. The presented dataset consists of financial ratios of Slovak companies. There are 21 distinctive financial ratios which are available for three consecutive years prior to evaluation year in which companies may have filed for bankruptcy or not. The companies come from four different industries - agriculture, construction, manufacture, retail. We provide data for four consecutive years 2013–2016 for each industry. All companies are categorized as small-medium enterprises according to EU classification. Prediction performance results on this dataset are published in the research paper “Bankruptcy prediction for small- and medium-sized companies using severely imbalanced datasets” (Zoričák et al., 2019).

Death or Debt? National Estimates of Financial Toxicity in Persons with Newly-Diagnosed Cancer

PURPOSE

The purpose of this study was to evaluate the impact of cancer upon a patient's net worth and debt in the US.

METHODS

This longitudinal study used the Health and Retirement Study from 1998-2014. Persons ≥50years with newly-diagnosed malignancies were included, excluding minor skin cancers. Multivariable generalized linear models assessed changes in net worth and debt (consumer, mortgage, home equity) at 2 and 4 years after diagnosis (year₊₂, year₊₄), controlling for demographic and clinically-related variables, cancer-specific attributes, economic factors, and mortality. A 2-year period before cancer diagnosis served as a historical control.

RESULTS

Across 9.5 million estimated new diagnoses of cancer from 2000-2012, individuals averaged 68.6±9.4 years with slight majorities being married (54.7%), not retired (51.1%), and Medicare beneficiaries (56.6%). At year₊₂, 42.4% depleted their entire life's assets, with higher adjusted odds associated with worsening cancer, requirement of continued treatment, demographic and socioeconomic factors (ie, female, Medicaid, uninsured, retired, increasing age, income, and household size), and clinical characteristics (ie, current smoker, worse self-reported health, hypertension, diabetes, lung disease) (P<.05); average losses were $92,098. At year₊₄, financial insolvency extended to 38.2%, with several consistent socioeconomic, cancer-related, and clinical characteristics remaining significant predictors of complete asset depletion.

CONCLUSIONS

This nationally-representative investigation of an initially-estimated 9.5 million newly-diagnosed persons with cancer who were ≥50 years of age found a substantial proportion incurring financial toxicity. As large financial burdens have been found to adversely affect access to care and outcomes among cancer patients, the active development of approaches to mitigate these effects among already vulnerable groups remains of key importance.

[Optimization of the prediction of financial problems in Spanish private health companies using genetic algorithms]

OBJECTIVE

This paper presents a methodology to optimize, using Altman's Z-Score for private companies, the prediction of private companies of the Spanish health sector entering a situation of bankruptcy.

METHOD

The proposed method consists of the application of genetic algorithms (GA) to find the coefficients of the formula of the chain of ratios proposed by Altman in the version of the score for private companies which optimize the prediction for Spanish private health companies, maximizing sensitivity and specificity, and thereby reducing type I and type II errors. For this purpose, a sample of 5,903 companies from the Spanish private health sector obtained from the database of the Iberian Balance Analysis System (SABI) between 2007 and 2015 was used.

RESULTS

The results show that the predictive model obtained with the AG presents greater accuracy, sensitivity and specificity than that proposed by Altman for private companies with both test data and all sample data.

CONCLUSIONS

The most important finding of this study was to establish a methodology that can identify the optimized coefficients for the Altman Z-Score, which allows a more accurate prediction of bankruptcy in Spanish private healthcare companies.

On solving mutual liability problems

This paper introduces mutual liability problems, as a generalization of bankruptcy problems, where every agent not only owns a certain amount of cash money, but also has outstanding claims and debts towards the other agents. Assuming that the agents want to cash their claims, we will analyze mutual liability rules which prescribe how the total available amount of cash should be allocated among the agents. We in particular focus on bilateral φ -transfer schemes, which are based on a bankruptcy rule φ . Although in general a φ -transfer scheme need not be unique, we show that the resulting φ -transfer allocation is. This leads to the definition of φ -based mutual liability rules. For so called hierarchical mutual liability problems an alternative characterization of φ -based mutual liability rules is provided. Moreover it is shown that the axiomatic characterization of the Talmud rule on the basis of consistency can be extended to the corresponding mutual liability rule.

Legal issues in governing genetic biobanks: the Italian framework as a case study for the implications for citizen's health through public-private initiatives

This paper outlines some of the challenges faced by regulation of genetic biobanking, using case studies coming from the Italian legal system. The governance of genetic resources in the context of genetic biobanks in Italy is discussed, as an example of the stratification of different inputs and rules: EU law, national law, orders made by authorities and soft law, which need to be integrated with ethical principles, technological strategies and solutions. After providing an overview of the Italian legal regulation of genetic data processing, it considers the fate of genetic material and IP rights in the event of a biobank’s insolvency. To this end, it analyses two case studies: a controversial bankruptcy case which occurred in Sardinia, one of the first examples of private and public partnership biobanks. Another case study considered is the Chris project: an example of partnership between a research institute in Bolzano and the South Tyrolean Health System. Both cases seem to point in the same direction, suggesting expediency of promoting and improving public-private partnerships to manage biological tissues and biotrust to conciliate patent law and public interest.

Bankruptcy reform and congressional action: The role of organized interests in shaping policy

This paper tests the degree to which PAC contributions can influence voting outcomes on legislation that disproportionately influences the poor. Using passage of the Bankruptcy Abuse and Consumer Protection Act of 2005 in the House of Representatives, the results show an association between PAC campaign contributions from the financial industry and support for final passage of bankruptcy reform. The findings suggest that one source of underrepresentation of the poor may be donations made by interest groups during campaigns.

Failure to pay for social health insurance premiums: Acts of protest or desperation?

Background

In Switzerland, basic health insurance is mandatory for all inhabitants, but a rising number of insured have arrears in premium payments, potentially leading to coverage suspension. We aimed at characterizing insured with debt enforcement proceedings with respect to socio-demographic and health utilization aspects.

Methods

Cross-sectional analysis of 508.000 insured with basic health insurance contracts in 2013, of whom 14,000 (2.8%) with debt enforcement proceedings, from 11 Swiss cantons. Groups were characterized using logistic regression and latent class analysis.

Results

Insured with debt enforcement proceedings were more likely to be young, male and without dependents (partner, kids). Having no supplementary insurance and receiving partial premium subsidies was associated with an increased debt enforcement proceedings risk.

Within the debt enforcement proceedings group, three subgroups were identified: 60% were young and seemingly healthy, with a below-average fraction of premium subsidy recipients (18%) and low out-of-pocket payments in prior year (median Swiss Francs 0).

Two groups consisted of relatively ill elderly persons (22%, 99% of whom with chronic illnesses) or families (18%), many of whom (29% and 51%) were recipients of premium subsidies. Median out-of-pocket payments in the prior year were high (Swiss Francs 625 and 688, respectively).

Conclusions

Sixty percent of premium arrears derive from young insured without apparent financial problems; 40% are owed by elderly and families, which are potentially hurt by coverage loss.

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Failure to pay for Swiss mandatory health insurance can lead to coverage suspension.

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Arrears for mandatory insurance have risen over last years, but reasons are unclear.

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60% of arrears pertain to young, single persons with low health care utilization.

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40% of arrears concern chronically ill elderly or families.

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Coverage suspension to enforce payment discipline may hurt vulnerable populations.