A note on selecting a response measure for financial distress

@inproceedings{Ward1997ANO,
  title={A note on selecting a response measure for financial distress},
  author={Terry J. Ward and Benjamin P. Foster},
  year={1997}
}
Since 1966, researchers have examined financial distress prediction models to determine the usefulness of accounting information to lenders. These researchers primarily used legal bankruptcy as the response variable for economic financial distress, or included legal bankruptcy with other events in dichotomous prediction models. However, theoretical models of financial distress normally define financial distress as an economic event, the inability to pay debts when due (insolvency). This study… CONTINUE READING

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