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The outcome variable is financial distress with 3 categories while the independent variables are financial factors and are continuous (about 12 of them).

  • $H_0$: Financial factors have no impact on the financial distress states.
  • $H_0$: financial factors when controlled for Macroeconomic factors have no significant impact on financial distress states.
  • $H_0$: Determinant factors of each of the three financial distress states categories are not different.
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  • $\begingroup$ The first two could be tested by likelihood ratio tests of multinomial logistic regression models, the first being a comparison of the model with all financial factors to an intercept-only model and the second a comparison of the model with financial factors and macroeconomic factors to a model with just macroeconomic factors. I don't follow exactly what you mean in the third hypothesis. $\endgroup$
    – Dave
    Sep 17, 2020 at 19:00

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When your predictors (i.v.) are continuous and your outcome variable (financial distress) is categorical level, most likely your best statistical test is simply logistic regression.

I hope this helps, good luck with your research!

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  • $\begingroup$ Logistic regression is a model and does not perform any kind of hypothesis test on its own. $\endgroup$
    – Dave
    Sep 17, 2020 at 17:30
  • $\begingroup$ Ah apologies, in applications such as SPSS the type of hypothesis test is simply named after the model. More specific in this case (since your dependent var has 3 categories, it would be the 'multinomial logistic regression test' $\endgroup$ Sep 17, 2020 at 17:49
  • $\begingroup$ Multinomial logistic regression isn't a test, either. $\endgroup$
    – Dave
    Sep 17, 2020 at 18:58

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