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Need help with my writing homework on Corporate Failure Rates and the Impact of the 1986 Insolvency Act. Write a 1250 word paper answering;
Need help with my writing homework on Corporate Failure Rates and the Impact of the 1986 Insolvency Act. Write a 1250 word paper answering; Interest rates are important because they reflect the monetary policy manifestation. Increase in inflation rates also result in increase in failure rates. Lastly, the age of a business is important because the lesser the age of a business, the more chances are that it would not survive.
It was assumed that the failure rates would have a positive relationship with interest rates, cost of use of capital, price levels and company formation and on the other hand, it would have a negative relationship with profits and credit availability. An error correction model was constructed which connected these variables with failure rates. Also, ADF test and PP test were carried out to find out the long term effects of the variables mentioned above. Regression analysis was also done on an equation formed by Johanson method (1982).
The results from the Chow test show that the imposition of the Insolvency act of 1986 has had some effects on the failure rates. Also, the coefficient of the dummy variable was also negative and statistically important which makes it possible for us to conclude that the failure rates decreased since the introduction of the Insolvency act.
Corporate Failure Rates and the Impact of the 1986 Insolvency Act is a very extensively researched case study.
