Social impact of bankruptcy: The case of Dina S.A. a Mexican automobile firm

Many financial researchers documented the causes of business failure and attempted to build models to anticipate insolvency situations in order to take corrective actions that would prevent financial difficulties and subsequent demise of the firm. Many of these models have been designed to prove the quality on the content of financial statements as predictors of future solvency. Given this predictive approach to business failure, studies that have attempted to analyze the bankruptcy effect have not enjoyed much attention, focusing in most cases in the legal aspects about firm liquidation. The objective of this research is to progress in this area, highlighting social impact analysis of bankruptcy about an automotive sector firm, which was one of the largest in metal sector: Dina S.A. Without any empirical measurement antecedents of social impact indicators, were collected social welfare indicators measured through Human Development Indexes and other specific indicators. These specific indicators were collected through fieldwork, with a direct survey that included indicators such as employment, family and lifestyle. The main finding of this research is that results based on specific indicators show a negative impact on the living standards of families who depended on this car emporium. However, when analyzing the human development indicators, before and after the date of closure of the company, it is not indicative of quality of life deteriorates.