Cross-Country Application of Manufacturing Failure Models
Sebastian Tomczak and
Piotr Staszkiewicz ()
Journal of Risk and Financial Management, 2020, vol. 13, issue 2, 1-10
The post-Altman models suffer from moral amortization. This paper asks whether models developed in one country can be applied in other economies. One of the characteristics of the prediction model is that a date drives the estimation. Thus, the estimated model based on one economy is not necessarily applicable to other economies. To verify such a statement, we carried out a literature review to identify the manufacturing models constructed during the last 30 years that were reported in reputable scientific journals. Our literature comprised 75 papers, and with the application of the citation count and citation mining, we selected a sample and traced the selected papers to the cross-country application. Our results indicated an existing gap in the cross-economy validation of existing manufacturing models. Our study has implications for policy, as the application of the prediction models to cross-economies’ consolidated financial statements is biased.
Keywords: failure; bankruptcy; chapter 11; regression count; meta-analysis; literature review; manufacturing insolvency; prediction; citation mining (search for similar items in EconPapers)
JEL-codes: C E F2 F3 G (search for similar items in EconPapers)
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Persistent link: https://EconPapers.repec.org/RePEc:gam:jjrfmx:v:13:y:2020:i:2:p:34-:d:322010
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