Business failure prevention : a state of the art

Research related to the prevention of business failure is surveyed in this paper. More
specifically, the evolution of the accounting literature on business failure from a predictive to
a preventive perspective is explained. After a clarification of the concept of business failure
prevention, the main features of representative studies are presented and analysed. These
studies are compared in terms of dynamics of the results proposed, of failure stage(s) studied,
of conceptual approach privileged, of research object and of methodology used to obtain
results. A typology of the research on business failure prevention is then proposed on the
basis of two pertinent differentiating criteria: the dynamics of the contributions and the failure
stage(s) taken into consideration. This paper finally stresses current limitations of business
failure prevention literature, particularly the need for a consensus on how and why firms fail
and the lack of investigation about typical failure profiles and paths. Potentialities for future
progress in the field are discussed at the end of the paper.