Modelling the Financial Failure of Romanian Stock Companies

Fejér-Király Gergely (), Ágoston Norbert () and Varga József ()
Additional contact information
Fejér-Király Gergely: Sapientia Hungarian University of Transylvania (Cluj-Napoca, Romania) Department of Business Sciences
Ágoston Norbert: IPHD in Regional Development, Faculty of Business and Economics, University of Pécs
Varga József: Institute of Finance and Accounting, Faculty of Economic Science, Kaposvár University

Acta Universitatis Sapientiae, Economics and Business, 2019, vol. 7, issue 1, 65-82

Abstract: The aim of the present article is to model and predict the financial failure of non-financial companies listed on the Bucharest Stock Exchange. The prediction models are based on the companies’ financial reports. The paper emphasizes the importance of processing outlier data and the significance of categorical independent variables. The paper contributes to bankruptcy and corporate financial failure research by presenting a Romanian situation. Results show that the model that uses 3-year financial data prior to the failure has a better accuracy. Several models have been compared, and it was found that using categorical independent variables as explanatory variables increased the accuracy of the models against those that used numerical regressors.

Keywords: corporate failure prediction; parametric modelling; non-parametric modelling; bankruptcy (search for similar items in EconPapers)
JEL-codes: G33 (search for similar items in EconPapers)
Date: 2019
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
https://doi.org/10.2478/eb-2019-0005 (text/html)

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:vrs:auseab:v:7:y:2019:i:1:p:65-82:n:5

DOI: 10.2478/auseb-2019-0005

Access Statistics for this article

Acta Universitatis Sapientiae, Economics and Business is currently edited by Dávid László

More articles in Acta Universitatis Sapientiae, Economics and Business from Sciendo
Bibliographic data for series maintained by Peter Golla ().