Search citation statements
Paper Sections
Citation Types
Year Published
Publication Types
Relationship
Authors
Journals
Abstract:This paper presents the construction of a new indicator (named the JT index) evaluating the economy's fi nancial stability, which is based on a fi nancial scoring model estimated on Czech corporate accounting data. Seven fi nancial indicators capable of explaining business failure at a 1-year prediction horizon are identifi ed. Using the model estimated in this way, an aggregate indicator of the creditworthiness of the Czech corporate sector (the JT index) is then constructed and its evolution over time is shown. This indicator aids the estimation of the risks of this sector going forward and broadens the existing analytical set-up used by the Czech National Bank for its fi nancial stability analyses. The results suggest that the creditworthiness of the Czech corporate sector steadily improved between 2004 and 2006. However, the JT index for 2007 and 2008 deteriorated what could be explained through global market turbulences while the further decrease in 2009 rather by the global recession. The used methodology for the construction of the JT index might be suitable for decision makers when evaluating the economy's fi nancial stability. Although our research is done as a case study on the Czech Republic, its basic idea might be easily applied to other countries as well.
Abstract:This paper presents the construction of a new indicator (named the JT index) evaluating the economy's fi nancial stability, which is based on a fi nancial scoring model estimated on Czech corporate accounting data. Seven fi nancial indicators capable of explaining business failure at a 1-year prediction horizon are identifi ed. Using the model estimated in this way, an aggregate indicator of the creditworthiness of the Czech corporate sector (the JT index) is then constructed and its evolution over time is shown. This indicator aids the estimation of the risks of this sector going forward and broadens the existing analytical set-up used by the Czech National Bank for its fi nancial stability analyses. The results suggest that the creditworthiness of the Czech corporate sector steadily improved between 2004 and 2006. However, the JT index for 2007 and 2008 deteriorated what could be explained through global market turbulences while the further decrease in 2009 rather by the global recession. The used methodology for the construction of the JT index might be suitable for decision makers when evaluating the economy's fi nancial stability. Although our research is done as a case study on the Czech Republic, its basic idea might be easily applied to other countries as well.
scite is a Brooklyn-based organization that helps researchers better discover and understand research articles through Smart Citations–citations that display the context of the citation and describe whether the article provides supporting or contrasting evidence. scite is used by students and researchers from around the world and is funded in part by the National Science Foundation and the National Institute on Drug Abuse of the National Institutes of Health.
hi@scite.ai
10624 S. Eastern Ave., Ste. A-614
Henderson, NV 89052, USA
Copyright © 2024 scite LLC. All rights reserved.
Made with 💙 for researchers
Part of the Research Solutions Family.