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An Empirical Analysis of External and Internal Factors Affecting Manufacturing Firm Failure and Resilience

Year: 2025

Type: article

Abstract: ABSTRACT We develop machine learning models that incorporate both external (deterministic) and internal (voluntaristic) factors affecting firm failure and survival. Using structured and unstructured data, we empirically investigate the external and internal factors that affect the US manufacturing firms’ business failure. We also examine how the interactions between external shocks and firm responses impact business failure. Our findings indicate that while external factors can significantly impact the likelihood that firms fail, specific management responses to these challenges can effectively mitigate the negative effects and contribute to firm survival.

Source: Journal of Corporate Accounting & Finance

DOI: 10.1002/jcaf.22797

Authors: Ting‐Tsen Yeh, Yuanzhang Xiao, Shirley J. Daniel, Minh Nguyen

Institutions: Louisiana State University in Shreveport, University of Hawaiʻi at Mānoa, Florida Atlantic University, Michigan State University

Language: English

Topic: Financial Distress and Bankruptcy Prediction

Subfield: Accounting

Field: Business, Management and Accounting

Domain: Social Sciences

SDG: Decent work and economic growth

Open Access status: bronze

Funder: Institute of Management Accountants