The paper focuses on two control instruments created by the Italian Companies and Exchange Commission (CONSOB), the Blacklist and the Grey-list, to monitor the going-concern perspectives of listed Italian companies in distress situations. The study analyzes the determinants underlying the probability to enter the lists, the main characteristics of the firms included in the lists, particularly referring to the Altman’s Z-Score ratios, and the characteristics, which favor the likelihood of exiting the lists. Through the use of logistic and OLS models, the research demonstrates that the entering, the stay, and the exiting of the companies from the Consob lists can be accurately predicted by the indicators of the Z-Score and the most relevant profitability ratios. This is an innovative analysis of the determinants that affect the relationship between the Consob and the companies listed in the Italian Stock Exchange. In particular, it could generate useful knowledge for the companies evaluating an IPO on the Italian market or already listed and contribute to creating awareness of the parameters affecting the going concern evaluation by the authority.
Corporate Distress and Supervisory Blacklisting: The Italian Case
Gori, Leonella
;Anconetani, Rachele
2020
Abstract
The paper focuses on two control instruments created by the Italian Companies and Exchange Commission (CONSOB), the Blacklist and the Grey-list, to monitor the going-concern perspectives of listed Italian companies in distress situations. The study analyzes the determinants underlying the probability to enter the lists, the main characteristics of the firms included in the lists, particularly referring to the Altman’s Z-Score ratios, and the characteristics, which favor the likelihood of exiting the lists. Through the use of logistic and OLS models, the research demonstrates that the entering, the stay, and the exiting of the companies from the Consob lists can be accurately predicted by the indicators of the Z-Score and the most relevant profitability ratios. This is an innovative analysis of the determinants that affect the relationship between the Consob and the companies listed in the Italian Stock Exchange. In particular, it could generate useful knowledge for the companies evaluating an IPO on the Italian market or already listed and contribute to creating awareness of the parameters affecting the going concern evaluation by the authority.
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