Interindustry linkages and business bankruptcy rates: evidence from Australia, 1973-1991

This paper explores the potential relationships among bankruptcy rates in Australia’s major industries during the observed period 1973-1991 within the framework of cointegration tests and simultaneous-equation systems. The empirical findings obtained from national and crossstate observations lend support to the existence of relationships between the bankruptcy rate in the building and construction industry and the bankruptcy rate in the finance and property industry as well as between the bankruptcy rate in the manufacturing industry and the bankruptcy rate in the transport, storage and communication industry.