: entrepreneurial self-selection via voluntary liquidation and external selection based on insolvency regulation. Distinguishing between … and West Germany, I find distinct education and size effects and a higher share of bankruptcy-related liquidations in East … Germany. These results are argued to reflect different industry structures, capital and labor market conditions in both parts …

of firms in Western Germany and Eastern Germany as a transitional economy. Innovative activity has a positive impact on … firm value proxied by ratings in Western Germany, but a negative impact in Eastern Germany. We also consider future … financial distress, and find that R&D in Eastern German firms leads to higher default risk, in contrast to Western Germany …

This study provides new stylized facts on the determinants of corporate failure and acquisition in Germany. It also …