The influence of exogenous factors on the success of reorganizations

Macroeconomic exogenous factors have so far not been used in models predicting the result of a reorganization, even though there are indications from the literature that they could have predictive power. The project aims to test the relationship of exogenous factors (GDP and unemployment) on the success of reorganizations. The expected return from a reorganization to creditors is highly dependent on the risk of its failure, participants of insolvency proceedings could therefore benefit from the findings, as the expected return would be more accurately discounted. Predicting the result of a reorganization is also highly relevant due to implementations of preventive restructuring, that share similar characteristics as reorganizations, in the European Union member states.

Study 1 will analyze data of Czech reorganizations. The model with exogenous factors will then be compared to the base model, which will be the first logit model predicting the result of a reorganization tested on Czech data.


Study 2 will be based on British data and will improve the methodology of study 1 by also implementing a summarizing model based on the Czech and British data with the country being a moderating variable of the relationship of macroeconomic conditions on the reorganization success.