Assessing risk factors of business failure in manufactoring sector: a count data approach from Sweden

The paper investigates risk factors of business failure of small-sized manufacturing firms in Sweden. Traditionally, linear models are applied to estimate the influence of risk factors on business failure by using continuous data. By contrast, in this study a count data approach is employed to deduce consistent Poisson, Quasi-Poisson, and Negative-Binomial estimators by using bankruptcy count data of small-sized Swedish manufacturing firms. Findings confirm that interest and exchange rates are significant determinants of business failure. Moreover, we found that openness is a determinant of business success. Our main finding highlights the role of business productivity, which turned out to be the main risk factor of business failure.