Predicting Corporate Financial Failure Using Macroeconomic Variables and Accounting Data

Acosta-González, Eduardo; Rodríguez, Fernando Fernández; Ganga, Hicham

doi:10.1007/s10614-017-9737-x

Cited by 19 publications

(5 citation statements)

References 32 publications

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“…The performed analysis of scientific works by Acosta-González et al (2019), Ninh et al (2018, Zelenkov et al (2017), Zvarikova et al (2017, Mitman (2016) reveals that company activities and probability of its bankruptcy are dependent not only on the internal but also on the external macroeconomic factors and reasons. Therefore, to frame a model grounded on macroeconomic variables and validate the efficiency of its application in comparison with traditional bankruptcy prediction models, quantitative research was conducted, during which statistical analysis and econometric modeling of macroeconomic and company's activity indicators were performed.…”

Section: Methodsmentioning

confidence: 99%

A Comparison on Leading Methodologies for Bankruptcy Prediction: The Case of the Construction Sector in Lithuania

et al. 2019

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Different economic environments differ in their characteristics; this prevents the usage of the same bankruptcy prediction models under different conditions. Objectively, the abundance of bankruptcy prediction models gives rise to the idea that these models are not in compliance with the changing business conditions in the market and do not meet the increasing complexity of business tasks. The purpose of this study is to assess the suitability of existing bankruptcy prediction models and the possibilities to increase the effectiveness of their application. In order to analyze theoretical aspects of the application of bankruptcy forecasting models and frame the research methodology, a systemic comparative and logical analysis of the scientific literature and statistical data, graphic data representation, induction, deduction and abstraction are employed. Results of the analysis confirm research hypotheses that bankruptcy prediction models based on macroeconomic variables are effective in identifying the number of corporate bankruptcies in a country and that the application of the model created on the grounds of macroeconomic indicators together with the traditional bankruptcy prediction model can improve the reliability of bankruptcy prediction. However, it was identified that models which are not specially adapted to companies in the construction sector are also suitable for forecasting their bankruptcies.

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Section: Methodsmentioning

confidence: 99%

A Comparison on Leading Methodologies for Bankruptcy Prediction: The Case of the Construction Sector in Lithuania

et al. 2019

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“…Thus, it is recommended to integrate macroeconomic variables in the development of early warning systems (Keasey & Watson, 1991;Manzareque et al, 2015) because insolvencies cannot be considered a pure financial phenomenon (Botazzi et al, 2011;Fredland & Morris, 1976). The inflation rate in percent per year (INFL) was collected from official statistics, and also included in the studies of Acosta-González et al (2019) and Butera & Faff (2006). Norton & Smith (1979) describe that annual inflation has a correlative relationship with financial statement analysis figures, which affects the stability and measurement accuracy of early detection models.…”

Section: Exogenous Systematic Risk Drivers: National Economy Variablesmentioning

confidence: 99%

Financial distress in the Austrian tourism industry: hotels and restaurants analysis

Situm¹

2023

EJTR

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Considering the limited number of studies on the early detection of crises and insolvencies in the tourism industry, there are several research gaps. Therefore, this study analyzes which financial and non-financial variables significantly influence the financial distress of the tourism businesses (hotels and restaurants) in Austria. The resource-based and network-based views were used as theoretical foundations to determine which variables influence the probability of financial distress, with a total of 776 observations from 2005 to 2015 inclusive. The results show that variables describing the endogenous unsystematic risk of tourism businesses (firm-specific level and destination level) make the greatest contribution to explaining financial distress, while exogenous unsystematic and exogenous systematic risk variables show little or no relevance.

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“…From a macroeconomic perspective, the literature has usually focused on variables such as GDP or the output gap (Benito et al, 2004;Carling et al, 2007;Contreras, 2016;Gaffeo & Santoro, 2009;Hol, 2007;Ptak-Chmielewska & Matuszyk, 2019), the level of unemployment (Acosta et al, 2019;Contreras, 2016;Everett & Watson, 1998, Buehler et al, 2012Ptak-Chmielewska & Matuszyk, 2019;Tomas, 2016) , the level of inflation (Acosta et al, 2019;Contreras, 2016;Liu, 2009), tax pressure (Buehler et al, 2012), interest rates (Everett & Watson, 1998, Tomas, 2016 or, the availability of credit (Altman, 1983;Liu, 2004, Tomas, 2016.…”

Section: Hypothesis: Macroeconomic and Institutional Determinants Of Failurementioning

confidence: 99%

Macroeconomic and institutional drivers of early failure among self-employed entrepreneurs: an analysis of the euro zone

García

Romero

Sarabia

2020

Economic Research-Ekonomska Istraživanja

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The development of entrepreneurial activity is essential to achieve sustainable economic growth and development in the euro area. However, the European institutions have not given the same importance to the failure of entrepreneurial activity and its causes. With this in mind, and considering the countries of the euro area, on the basis of Eurostat's business demography data for the years 2008 to 2016, an analysis of panel data was conducted relating the early failure of self-employed entrepreneurs to their macroeconomic and institutional environment. The results thus show a negative relationship with respect to the quality of formal institutions, entrepreneurial culture and social norms, the efficiency of goods markets and entrepreneurial freedom. On the other hand, a positive relationship is shown with respect to the high status assigned to successful entrepreneurs.

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Predicting Corporate Financial Failure Using Macroeconomic Variables and Accounting Data

Cited by 19 publications

References 32 publications

A Comparison on Leading Methodologies for Bankruptcy Prediction: The Case of the Construction Sector in Lithuania

A Comparison on Leading Methodologies for Bankruptcy Prediction: The Case of the Construction Sector in Lithuania

Financial distress in the Austrian tourism industry: hotels and restaurants analysis

Macroeconomic and institutional drivers of early failure among self-employed entrepreneurs: an analysis of the euro zone

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