THE USING FACTOR ANALYSIS METHOD IN PREDICTION OF BUSINESS FAILURE

Mary Violeta Petrescu
Additional contact information
Mary Violeta Petrescu: University of Craiova Faculty of Economics and Business Administration

Annals of University of Craiova - Economic Sciences Series, 2015, vol. 1, issue 43, 282-288

Abstract: After the great financial crisis of 2008 many companies all over the world was facing with bankruptcy or insolvency, because it were not able to face to the all challenges and the unexpected changes in the economy. Literature review and study demonstrated that the prediction of the risk of bankruptcy of firms is imperative. However, the lack of a comprehensive theory of business failure has led to the selection of a variety of financial variables in insolvency prediction. Most researchers started with a large set of variables and then applied different statistical techniques or stepwise procedures in order to reduce the number of predictors. This study highlights the utility of factor analysis in prediction of business failure.

Keywords: business; company; Factor Analysis; failure; Principal Components Analysis (search for similar items in EconPapers)
JEL-codes: C38 G01 (search for similar items in EconPapers)
Date: 2015
References: View complete reference list from CitEc
Citations:

Downloads: (external link)
http://feaa.ucv.ro/AUCSSE/0043v1-029.pdf (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:aio:aucsse:v:1:y:2015:i:43:p:282-288

Access Statistics for this article

Annals of University of Craiova - Economic Sciences Series is currently edited by Sorinel Domnisoru

More articles in Annals of University of Craiova - Economic Sciences Series from University of Craiova, Faculty of Economics and Business Administration Contact information at EDIRC.
Bibliographic data for series maintained by Anca Bandoi ( this e-mail address is bad, please contact ).