 An empirical evaluation of four financial distress prediction models for Greek firms: is there a 'most appropriate' model?Dimitrios P. Charalambidis and Dimitrios L. Papadopoulos International Journal of Managerial and Financial Accounting, 2010, vol. 2, issue 1, 95-112 Abstract: In this paper, four financial distress prediction models for Greek firms are tested. Relevant analysis is based on a sample of 37 financially distressed (18 listed and 19 non-listed) and 226 non-distressed (48 listed and 178 non-listed) firms. The superiority of a particular model relates to its predictive accuracy and expected loss of misclassification errors in a range of likely values for the prior probability of financial distress and the cost ratio of Types 1 and 2 errors. We find that: a) rates of correct predictions are unstable when models are used to predict financial distress in periods following the one that was considered to estimate them; b) if a model is found to be the most superior, it does so for almost all likely values of cost and prior probabilities ratios; c) no single model can be considered absolutely appropriate to predict the financial distress of Greek firms as superiority of models differs between non-listed and listed firms. Keywords: financial distress prediction; predictive ability; misclassification cost ratio; expected loss; Greek firms; empirical evaluation; Greece. (search for similar items in EconPapers) Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:ids:injmfa:v:2:y:2010:i:1:p:95-112 Access Statistics for this article More articles in International Journal of Managerial and Financial Accounting from Inderscience Enterprises Ltd |
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