Successful turnarounds in bankrupt firms? Assessing retrenchment in the most severe form of crisis

During economic downturns, firms file for bankruptcy in an effort to attempt a ‘turnaround’. The objective of this study is to assess the effectiveness of retrenchment strategies in the context of bankruptcy, as the most severe form of crisis. We conducted a longitudinal analysis of a sample of 868 bankrupt Spanish firms during the period 2004–2017. The empirical results show that stakeholder support and deep cost retrenchment increase the...