Corporate characteristics and firm’s financial fragility: evidence from Kazakhstan
Ybrayev Z. Rustanov S. Baglanova A.
October 2025Springer Science and Business Media Deutschland GmbH
International Economics and Economic Policy
2025#22Issue 4
Our aim is to examine the link between corporate financial health indicators and the firms’ overall financial fragility in an emerging market economy. In this paper, we use administrative firm-level data that covers small, medium, and large firms in a de-identified form and come from the Bureau of National Statistics of Kazakhstan. We utilize various components of balance sheet and income financial statement indicators to calculate Altman EM Z-score as a measure of corporate vulnerability. We report the following main results. First, we document evidence that firms in Kazakhstan with high leverage and large size are more financially vulnerable. The size effect is the most noticeable in the sectors of construction, trade, and mining, while the impact of leverage is more apparent in agriculture and construction. Second, we find that firms with more liquid assets and higher age are less financially vulnerable. Third, we see that firms that eventually become bankrupt have significantly lower EM Z-scores than the average value of non-bankrupt firms. Finally, we observe that firms with a bank loan are more financially vulnerable than firms without a bank loan.
Corporate debt , Emerging markets , Financial fragility , Kazakhstan
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National Bank of Kazakhstan, Uly Dala Avenue, 57A, Astana, Kazakhstan
National Bank of Kazakhstan
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