International Journal of Applied Economics, Finance and Accounting ISSN 2577-767X Vol. 14, No. 1, pp. 25-33. 2022 DOI: 10.33094/ijaefa.v14i1.636 © 2022 by the authors; licensee Online Academic Press, USA 25 © 2022 by the authors; licensee Online Academic Press, USA The Macroeconomic Determinants of Moroccan Corporate Bankruptcy Youssef Zizi 1* Mohamed Oudgou 2 Abdeslam El Moudden 3 1,3 ENCG Kenitra, Ibn Tofail University, Kenitra, Morocco. 1 Email: youssef.zizi@uit.ac.ma Tel: +212623649345 3 Email: elmoudden.abdesselam@uit.ac.ma Tel: +212661765545 2 ENCG Beni Mellal, University Sultane Moulay Slimane, Beni Mellal, Morocco. 2 Email: m.oudgou@usms.ma Tel: +212670905675 Licensed: This work is licensed under a Creative Commons Attribution 4.0 License. Keywords: Bankruptcy Macroeconomic determinants OLS regression. JEL Classification E00; G33. Received: 30 May 2022 Revised: 20 July 2022 Accepted: 5 August 2022 Published: 25 August 2022 (* Corresponding Author) Abstract The absence of prior research in Morocco using the macroeconomic explanatory approach to bankruptcy, combined with the new peak in business failure in Morocco in 2021, motivates the need to explore the influence of macroeconomic indicators on the Moroccan bankruptcy rate. Therefore, the objective of this article is to examine the impact of these indicators on the Moroccan bankruptcy rate using multiple regression models over the period 2010-2021. The obtained results show that new firm creation and the interest rate positively and significantly affect the bankruptcy rate, while Euro and Dollar exchange rates have negative and significant effects on the dependent variable. The results suggest guidelines for policymakers and practitioners to refine the economic conditions in order to achieve a low bankruptcy rate in Morocco. Funding: This study received no specific financial support. Competing Interests: The authors declare that they have no competing interests. 1. Introduction The literature on business failure dates back to the works of Fitzpatrick (1932) and Smith and Winakor (1935) in the 1930s. Several empirical studies have been published on this topic in different study contexts (Shi & Li, 2019). One of the main motivations for these studies is to allow practical decisions to be made based on the obtained results (Ball & Foster, 1982). Business failure is a complex concept with a multitude of definitions. Bankruptcy refers to the ultimate stage of business failure and constitutes its legal definition. Refait-Alexandre (2004) defined bankruptcy as the opening of legal proceedings following a situation of default. In Morocco, business failures reached a peak of 10,556 in 2021, having increased by 58.62% compared to 2020. The number of bankruptcies recorded in Morocco in 2021 was a new national record (Inforisk, 2022). Bankruptcy results in significant direct and indirect costs to creditors, shareholders, and other stakeholders. In addition, bankruptcies can have adverse macroeconomic effects (Hazak & Mannasoo, 2007). Nevertheless, the majority of studies on business failure in general, and bankruptcy in particular, have been based on the analysis of microeconomic data (Ben Jabeur, Mefteh-Wali, & Carmona, 2021). This is also the case in the Moroccan context, where a limited number of studies on business failure have examined the impact of financial ratios (Azayite & Achchab, 2017; Bahrin, Yusuf, Muhammad, & Ghani, 2022; Obeid 2022; Zizi, Oudgou, & Moudden, 2020) without considering the impact of macroeconomic indicators. Therefore, there is a need to explore the effect of these indicators on bankruptcy in Morocco. Indeed, several studies have shown that the introduction of macroeconomic variables in econometric models leads to a better understanding and increases the models’ predictive power of bankruptcy (Habib, Costa, Huang, Bhuiyan, & Sun, 2020). The objective of the paper is to examine the influence of macroeconomic indicators on the Moroccan bankruptcy rate. Hence, this article aims to answer the following two questions: What are the