The problem of bankruptcy in listed companies – with a crisis in the background

The financial crisis initiated by the collapse of the Lehman Brothers investment bank in 2007 did not remain indifferent to the capital market. The financial crisis initiated in the US has become a crisis of a global dimension, having a very strong impact on the functioning of economies in the world. Capital markets, particularly stock exchange markets, reacted very strongly to this phenomenon, the first consequence of which, in principle, were declines in prices of financial instruments in the  on-trading floor. Investors reacted very strongly and negatively to signals of crisis and in fact up until now the stock exchange has still not rebuilt their trust.

The financial crisis, and in fact the global economic crisis, has affected all spheres of social and economic life. This proves that the crisis can manifest itself in different ways. In the case of companies it is quickly noticeable that their economic and financial condition which is a derivative of their functioning in the economy.

However, one can hypothesize that the crisis has, in a sense, a positive dimension and may provide an opportunity for market development. This can be done in different ways. The market is, e.g., "cleansed" of weak economic entities operating inefficiently and poorly managed. A collapse or liquidation of such entities creates an opportunity for the emergence of new companies.

Therefore, what is interesting is whether the collapse and bankruptcy of companies in the period of crisis are actually a phenomenon occurring on a larger scale? Based on observation of changes over time of the phenomenon of bankruptcies or collapses, can one talk of coming out of the crisis or of its deepening? Can one observe positive aspects of the crisis?

One can address the issue of the financial crisis, the economic crisis and their consequences by analyzing the many levels of socio-economic life. The study mainly analyzed the problem of bankruptcy and collapse of companies.

This paper aims to investigate the effects of bankruptcy and collapse in the years of the economic crisis. The research was conducted for companies listed on the Warsaw Stock Exchange. The analysis covered the 2007 – 2014 period. The study also used information about the fundamental strength of companies and how this relates to the problem of their bankruptcy and collapse. Other economic and financial factors were taken into account allowing the assessment of effects of the crisis and its positive impact.