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Financial Distress, Corporate Borrowing and Industrial Decline: The Lancashire Cotton Spinning Industry, 1918-1938

Higgins, D. and Toms, S. (2003) Financial Distress, Corporate Borrowing and Industrial Decline: The Lancashire Cotton Spinning Industry, 1918-1938. Accounting, Business and Financial History, 13 (12). pp. 207-232. ISSN 0958-5206

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Abstract

The analysis presented is based on a case study of Lancashire cotton textile firms. It traces their financial history through the sharp boom of 1919-20, and the sudden crisis that followed. Using a sample of representative companies it is shown that firms unwittingly adopted inappropriate financial structures that acted as the decisive constraint on the adoption of recovery strategies in the subsequent slump. The paper explains how the relationship between indebtedness and asset values prevented subsequent internal financial retrenchment, restructuring and re-equipment, and dictated the competitive processes within the industry. It is demonstrated that financial constraints were the decisive factor determining the feasibility of competitive strategies available to the industry's leaders.

Item Type: Article
Academic Units: The University of York > The York Management School
Depositing User: York RAE Import
Date Deposited: 12 Aug 2009 15:51
Last Modified: 12 Aug 2009 15:51
Published Version: http://dx.doi.org/10.1080/0958520032000084996
Status: Published
Publisher: Taylor & Francis
Identification Number: 10.1080/0958520032000084996
URI: http://eprints.whiterose.ac.uk/id/eprint/5523

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