Failure risk - A comparative study of UK and Russian firms

Using data for corporate insolvency in Russia for 1995-1996, failure risk i s modelled by the logit estimator. The sample size is controlled by the boo tstrap estimates of model statistics and by comparison with a similar rando m sample drawn for the UK over recession years 1990-1991. The model for Rus sia indicates that profitability is the dominant predictor as compared with gearing and liquidity for the UK. In the context of softer budget constrai nts and the common use of barter in Russian payments, the results suggest t hat policymakers and practitioners should pay specific attention to the pro fit position of companies. (C) 2001 Society for Policy Modeling. Published by Elsevier Science Inc.