Identifying Failing Companies: A Re- evaluation of the Logit, Probit and DA Approaches
نویسنده
چکیده
This paper examines the causes of bankruptcy for a sample of 949 UK listed companies between 1987–1994. The most important determinants of bankruptcy are profitability, leverage, cashflow, company size, industry sector and the economic cycle. Tests for heteroskedasticity revealed that cashflow and leverage have significant non-linear effects, and taking account of these non-linearities improves the model’s explanatory power. In contrast to previous studies, the paper argues that well-specified logit and probit models can identify failing companies more accurately than discriminant analysis (DA). © 1999 Elsevier Science Inc.
منابع مشابه
Probit and nested logit models based on fuzzy measure
Inspired by the interactive discrete choice logit models [Aggarwal, 2019], this paper presents the advanced families of discrete choice models, such as nested logit, mixed logit, and probit models to consider the interaction among the attributes. Besides the DM's attitudinal character is also taken into consideration in the computation of choice probabilities. The proposed choice models make us...
متن کاملThe Effect of Managers' Stability and the Stability of Institutional Stakeholders on the Probability of Fraud, by Employing Different Approaches to calculate Fraud
The purpose of this study was to investigate the effect of managers' stability and the stability of institutional stakeholders on the probability of fraud in companies. In line with the research goal, two hypotheses were developed. To test these two hypotheses using a systematic elimination method, a sample of 101 companies during the eight-year period between 2010 and 2017 was selected. In thi...
متن کاملتعیین ارزش اقتصادی آثار تاریخی بیستون با استفاده از روش تمایل به پرداخت افراد (WTP)
The ancient and historic site of Bisotun is one of the most reliable archaeological works of the world, which was registered in the UNESCO World Heritage List in 2006. This research studies the economic value (including recreational value and existential value) of Bisotun Historical Complex using the Logit and Probit valuation models. The statistical population of the study was visitors to the ...
متن کاملComparison of Vehicle-Ownership Models
Empirical studies on household car ownership have used two types of discrete choice modelling structures, the ordered and the unordered. In ordered structures such as the ordered logit and ordered probit models, the choice of the number of household-vehicles arises from a uni-dimensional latent index that reflects the propensity of a household to own vehicles. Unordered response models, on the ...
متن کاملIdentifying patterns of the dynamic credit risk of banks customers and financial institutions: case study- an Iranian bank
Credit risk assessment has always been one of the most important concerns of banks. Widely used models such as financial models have been used to assess credit risk so far. But increasing non-performing loans indicates that today these models cannot assess the credit risk of customers. Inconstant and uncertain environmental, social and political factors affect customer behavior and change custo...
متن کامل