Does the macroeconomic context condition the prediction of business failure?

Abstract

The objective of this study is to identify both micro and macroeconomic variables that allow us to analyze in advance the probabilities of business failure. The selected sample contains all the listed companies of the IPC index of Mexico, IBEX-35 of Spain and EURO STOXX50 of Europe for a time horizon of 5 years. Our contribution lies in the empirical testing of the results by two different techniques: general estimating equations (a parametric technique) and a decision tree (a non-parametric technique based on artificial intelligence). The obtained results show that the factors of liquidity, indebtedness and profitability are the ones that affect the prediction of corporatebankruptcy for listed companies, but not the macroeconomic ones, since the macroeconomic peculiarities of each country are diluted by the importance of the economic-financial structure of each company.