Title

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

Business and Law

School

Accounting, Finance and Economics

RAS ID

4306

Comments

This article was originally published as: 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. Original article available here

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

 

Link to publisher version (DOI)

10.2139/ssrn.925596