Analysis of Bankruptcy Factors in Presale Projects and Their Policy Implications

In this study, we suggest policy implications for managing the risk of bankruptcy in housing presale projects in Korea. In conclusion, we find that the competing risk Cox proportional hazard model (PHM) is the best model for explaining the bankruptcy factors of projects and the banks that lend const...

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Bibliographic Details
Published inEmerging markets finance & trade Vol. 60; no. 13; pp. 3007 - 3025
Main Authors Kwon, HyuckShin, Bang, DooWon, Han, SeoungUk
Format Journal Article
LanguageEnglish
Published Abingdon Routledge 20.10.2024
Taylor & Francis Ltd
Subjects
Banking
Bankruptcy
bankruptcy factors
competing risk Cox PHM
Cox PHM
Default
Housing authorities
Presale
Public housing
Risk
single-index model
South Korea
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Summary:In this study, we suggest policy implications for managing the risk of bankruptcy in housing presale projects in Korea. In conclusion, we find that the competing risk Cox proportional hazard model (PHM) is the best model for explaining the bankruptcy factors of projects and the banks that lend construction funds and policy authorities need to manage presale projects by considering bankruptcy factors (the initial presale rate, regional factor, the credit rating of the developers, the housing common factor). This study differs from previous studies in that it uses the competing risk Cox proportional hazard model and single-index model methodologies for empirical analysis, distinguishes the causes of business failure as default and the default of repurchase agreement options that are similar to actual defaults, and suggests policy implications based on the analysis.
ISSN:1540-496X
1558-0938
DOI:10.1080/1540496X.2024.2332399