Abstract
The purpose of this article is to identify the success factors of corporate restructuring by studying the firms that have survived from the financial distress in South Korea. The logit analysis is used with the two qualitative variables of success and failure. Selected independent variables are firm risk, free asset, audit opinion, liquidity, firm size and period of existence. The results show that audit opinion, risk of the firm and firm size are the important variables in predicting the survival prospect of financially distressed firms. The percentage of correct prediction is 81.4% for the estimation sample.
Notes
1 When some outliers in the SIZE variable are deleted, the hypothesized result is obtained.
2 The procedures are similar to those used by Altman (Citation1968), Ohlson (Citation1980) and Campbell (Citation1996), among others.