Financial distress and corporate turnaround: A review of the literature and agenda for research
Document Type
Journal Article
Publisher
Griffith Business School, Griffith University
Faculty
Faculty of Business and Law
School
School of Accounting, Finance and Economics
RAS ID
4306
Abstract
A considerable body of research aims to discriminate between companies with the potential to stem decline, or recover from financially distressed conditions, from those which will ultimately fail. The literature spans a number of academic disciplines and embraces theorising, case studies and anecdote. Even so much confusion remains regarding the circumstances where recovery is feasible, and those factors and strategies likely to facilitate such recovery. This paper reviews this literature by focusing on the turnaround decision, the process and problems of reorganization and the probability of its success. Categorization of studies centres on the turnaround process to facilitate the generation of an analytical overview of findings with regard to alternative strategies which are a precondition for success. The paper concludes with a future research agenda embracing an alignment of strategy, implementation, and the sources of financial distress, together with an extended scope for turnaround studies.
DOI
10.2139/ssrn.925596
Access Rights
free_to_read
Comments
Liou, D. K., & Smith, M. (2006). Financial distress and corporate turnaround: A review of the literature and agenda for research. Accounting, Accountability and Performance 13(1), 74-114. Available here