Relationship between managerial sentiments and corporate bankruptcies

抄録

This study clarifies the relationship between trends in the number of corporate bankruptcies and trends in corporate managerial sentiment indicators. To this end, we perform an empirical study by modeling monthly bankruptcy counts with a generalized linear mixture model incorporated with business sentiment indices for covariates. The empirical results show that managerial sentiments efficiently explain trends in the number of corporate bankruptcies in Japan. In addition, the predictive power of the business condition index is equivalent to or greater than the prediction by macroeconomic variables in the sample period.