—This paper aims to create bankruptcy prediction
models using logistic regression and neural networks based on
the data of Estonian manufacturing firms. The models are
composed and tested on the whole population data of bankrupt
firms and their vital counterparts for years 2005-2008.
Composed models are also tested on the data of firms from
economic recession years of 2009-2010. The results indicate that
models based on different methods have similar predictive
abilities, yet two and three years before bankruptcy they are not
as good as for one year before bankruptcy. Also, the models do
not perform as well when using data from economic recession
—Bankruptcy prediction, manufacturing firms.
Oliver Lukason and Martin Grünberg are with the Tartu University,
Faculty of Economics and Business Administration, Narva road 4, Tartu
51009, Estonia (e-mail: email@example.com).
Cite:Martin Grünberg and Oliver Lukason, "Predicting Bankruptcy of Manufacturing Firms," International Journal of Trade, Economics and Finance vol.5, no.1, pp. 93-97, 2014.