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- Title
DO MANAGEMENT DECISIONS MATTER WHEN FIRMS ARE IN DISTRESS?
- Authors
Flagg, Donald; Kudrimoti, Sanjay; Margetis, Speros
- Abstract
We examine if a firm's success in leaving distress is explained by firm characteristics and manager decisions. We proxy the managers' decisions by measuring changes in operating, investing, and financing choice variables. We find that timely decisions with regard to product refinement, proxied by increased investment in research and development and reduction in capital expenditures, increase the probability of successful turnaround. Further, the results show that increased financing through additional sale of equity, acquisitions and sale of assets do not help a firm exit financial distress.
- Publication
Review of Management Innovation & Creativity, 2011, Vol 4, Issue 9, p1
- ISSN
1934-6727
- Publication type
Academic Journal