D'Aveni, Richard A. - In: Management Science 35 (1989) 9, pp. 1120-1138
This paper proposes and tests a new model of organizational bankruptcy based on agency and prospect theory. The paper … financial and managerial assets. If a firm falls below that threshold level, it has a higher probability of bankruptcy because … creditors withdraw their financial support from the debtor. Consistent with agency theory, this implies that bankruptcy can be …