Affiliation:
1. School of Business University of Southern Queensland Springfield Central Queensland Australia
2. University of South Australia Adelaide South Australia Australia
Abstract
AbstractWe examine the association between firm size and the likelihood of emergence from bankruptcy filed under Chapter 11. Using 715 firm‐year observations from 1979 to 2019, we find that large firms are less likely to emerge. We use performance, financial constraints, and information environment as potential channels to examine the mechanism by which firm size affects the likelihood of firm emergence from bankruptcy. Further analysis shows that the likelihood of bankruptcy emergence is lower for large firms before the global financial crisis of 2007.