A Test of Catastrophe Theory Applied to Corporate Failure
Description:
Catastrophe theory (CT) is a relatively new mathematical theory that comprehensively describes a system exhibiting discontinuous behavior when subjected to continuous stimuli. This study tests the theory using capital-market data. The data is a time series of stock returns on firms that filed for Chapter 11 reorganization during 1980-1985. The CT model used is based on a corporate failure model suggested by Francis, Hastings and Fabozzi (1983). The model predicts 1) as the filing date approache…
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Date:
August 1987
Creator:
Gregory-Allen, Russell B. (Russell Brian)
Partner:
UNT Libraries