Essays on Vulnerability to and Likelihood of Reemergence from Corporate Bankruptcy

Date of Award


Degree Type


Degree Name

Doctor of Philosophy (PhD)




Ravi Dharwadkar


Bankruptcy, Bureaucratic costs, Corporate governance, Corporate strategy, Directors, Diversification

Subject Categories

Business Administration, Management, and Operations


This dissertation makes two important contributions to literature on organizational failure. The first study explores the relationship between a firm's corporate (diversification) strategy and its vulnerability to failure (bankruptcy), and the second study explores the likelihood of reemergence from the governance perspective. In the first study, I show that there is a significant difference between the bureaucratic costs incurred by bankrupt and non-bankrupt firms. My results suggest that the likelihood of a firm going bankrupt significantly increases as its bureaucratic costs increase. These results provide robust support for resource dependence predictions, and highlight the important role implementation plays in the success of corporate strategy, i.e., if a firm incurs bureaucratic costs that offset the synergistic benefits it derives from its diversification profile, its performance is likely to be suboptimal and prone to failure. My study further shows that higher related diversification, especially when combined with higher bureaucratic costs, makes firms most vulnerable to failure. In the second study, I show that when resourceful directors are actively involved in the firm's business, a firm's likelihood of reemergence goes up significantly. Further, the relationship between directors' resourceful interlinks and reemergence likelihood is curvilinear such that too few or too many linkages reduce the likelihood of reemergence. Finally, I also show that nature of resources useful to firms is contingent on the nature of the business the firm is in, i.e., while resourceful insiders are valuable to firms in knowledge-intensive industries, resourceful outsiders are more valuable to firms in knowledge-mundane industries. Overall, this study extends resource dependence perspective and provides a more robust and contextualized understanding of directors' impact on firm performance.


Surface provides description only. Full text is available to ProQuest subscribers. Ask your Librarian for assistance.