Corona Shutdown and Bankruptcy Risk

(together with Yaz Gulnur Moradoglu) IWH Online 3/2020, 17.06.2020

Abstract: The Corona shutdown increases the probability of corporate bank­ruptcy. An analysis based on corporate financial statements from 2014 to 2018 reveals that in the United Kingdom, 73% of shutdown firms are not able to cover interest expenses from earnings before interest and taxes if they lose one twelfth of annual turnover. In Germany, the frac­tion amounts to 81%.

Full text: IWH Online