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http://dx.doi.org/10.5762/KAIS.2014.15.5.3260

Influence of Housing Market Changes on Construction Company Insolvency  

Jang, Ho-Myun (Division of Occupational Health & Safety Engineering, Semyung University)
Publication Information
Journal of the Korea Academia-Industrial cooperation Society / v.15, no.5, 2014 , pp. 3260-3269 More about this Journal
Abstract
The construction industry has strong ties with other industries, and so construction company insolvency also has a strong influence on other industries. Prediction models addressing the insolvency of construction company have been well studied. Although factors contributing to insolvency must precede those of predictions of insolvency, studies on these contributing factors are limited. The purpose of this study is to analyze the influence of changes in the housing market on construction company insolvency by using the Vector Error Correction Model. Construction companies were divided into two groups, and the expected default frequency(EDF), which indicates insolvency of each company was measured through the KMV model. The results verified that 10 largest construction companies were in a better financial condition compared to relatively smaller construction companies. As a result of conducting impulse response analysis, the EDF of large companies was found to be more sensitive to housing market change than that of small- and medium-sized construction companies.
Keywords
Housing Market; Construction Company Insolvency; Expected Default Frequency; Vector Error Correction Model;
Citations & Related Records
Times Cited By KSCI : 1  (Citation Analysis)
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