Insolvency prediction for Portuguese agro-industrial SME: Tree Bagging Methodology

José Augusto Canto, Amélia Cristina Ferreira Silva, Gabriela Leite and Carlos Machado-Santos

Agricultural Economics Review, 2019, vol. Volume 20, issue Issue 2

Abstract: The aim of this study lies on the empirical application of the tree bagging methodology, in order to predict the insolvency of Portuguese Small and Medium-sized Enterprises (SME) in the agro-industrial sector, one year in advance. The database consists of financial indicators of 243 companies, available at SABI (Iberian Balance Analysis System), all from agro-industrial sector. The proposed model reveals a robust result when compared with traditional parametric models. The results show that two indicators – “short-term liquidity” and “capacity to generate results appropriate to the size” – were the most statistically relevant, both in the Proposed Model and the Logistic Regression model.

Keywords: Financial Economics; Industrial Organization (search for similar items in EconPapers)
Date: 2019
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Persistent link: https://EconPapers.repec.org/RePEc:ags:aergaa:330639

DOI: 10.22004/ag.econ.330639

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