Early Warning System of the bankruptcy risk of building companies − a comparison of the discriminate analysis and the logit model

Karol Rusiecki and Anna Białek-Jaworska

Ekonomia journal, 2015, vol. 43

Abstract: This article describes the issues of early warning of the risk of bankruptcy in the construction sector, comparing the discriminate analysis and the logit model. In a market economy, with ever-increasing competition and payment gridlocks, anticipating danger of bankruptcy of enterprises is gaining importance. This paper aims to build a discriminatory and logit model to predict the bankruptcy of construction companies on data from the period of economic downturn of a learn- ing sample, consisting of 98 companies. The nature of application results of research carried out in the article on the learning sample relates to the use of the estimated model to predict the bankruptcy of enterprises in the Polish economy, in good times in the construction industry, on a test sample consisting of 44 construction companies for one year and two years before the bankruptcy. The study uses financial data from the information service EMIS and Polish Monitor B, of 71 construction companies that formally respectively in 2014 or 2013 (for the learning sample) and 2009 (for the test sample) filed for bankruptcy and 71 construction companies that continue to operate at least one year following the period considered.

Keywords: bankruptcy of enterprises; discriminate analysis; logit model; the effectiveness of prognostic (search for similar items in EconPapers)
Date: 2015
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Persistent link: https://EconPapers.repec.org/RePEc:eko:ekoeko:43_137

DOI: 10.17451/eko/43/2015/126

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