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The geographic determinants of bankruptcy: evidence from Switzerland

Buehler, Stefan ; Kaiser, Christian ; Jaeger, Franz

In: Small Business Economics, 2012, vol. 39, no. 1, p. 231-251

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    Title
    • The geographic determinants of bankruptcy: evidence from Switzerland
    Author
    • Buehler, Stefan. University of St. Gallen, IFF-HSG, Varnbüelstr. 19, 9000, St. Gallen, Switzerland
    • Kaiser, Christian. HSBC, 8 Canada Square, E14 5HQ, London, UK
    • Jaeger, Franz. Executive School of Management, Technology and Law, University of St. Gallen, Holzstr. 15, 9010, St. Gallen, Switzerland
    Document Type
    • Postprint
    Language
    • English
    Published in
    • Small Business Economics, 2012, vol. 39, no. 1, p. 231-251. Springer US; http://www.springer-ny.com
    Other Version
    OAI-PMH Identifier
    • oai:doc.rero.ch:319566
    Summary
    This paper examines the geographic determinants of firm bankruptcy. We employ hazard rate models to study the bankruptcy risk of a firm, allowing for time-varying covariates. Based on a large sample from all geographic areas and the major sectors of the Swiss economy, we find the following main results: (1) Bankruptcy rates tend to be lower in the central municipalities of agglomerations; (2) bankruptcy rates are lower in regions with favorable business conditions (where corporate taxes and unemployment are low and public investment is high); (3) private taxes and public spending at the local level have little impact on bankruptcy rates