Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/209976 
Year of Publication: 
2010
Series/Report no.: 
Working Paper No. 2010/31
Publisher: 
Norges Bank, Oslo
Abstract: 
We investigate the relationship between bankruptcy risk and expected future sales growth for Norwegian non-listed firms for the period 1988-2007. We find that firms with high bankruptcy risk also have high expected future growth. Financial ratios characterizing firms with high bankruptcy risk also characterize firms with high future expected growth. Small firms, firms with low levels of equity and retained earnings, firms with low profitability and low levels of sales per unit of capital, have all higher expected future growth rates than other firms. These findings suggest a tradeoff between the upside potential of high growth and the downside risk of bankruptcy.
Subjects: 
non-listed firms
growth
bankruptcy risk
JEL: 
G10
G30
G33
Persistent Identifier of the first edition: 
ISBN: 
978-82-7553-588-5
Creative Commons License: 
cc-by-nc-nd Logo
Document Type: 
Working Paper
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