Probability of Corporate Bankruptcy: Application to Portuguese Manufacturing Industry SMEs

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dc.contributor.authorMadaleno, Mara
dc.contributor.authorCorreia, Pedro
dc.contributor.authorPacheco, Luís Miguel
dc.contributor.authorMaldonado, Isabel
dc.date.accessioned2022-08-12T15:12:20Z
dc.date.available2022-08-12T15:12:20Z
dc.date.issued2022-08
dc.description.abstractThis paper aims to develop a model for predicting corporate bankruptcy for SMEs in the Portuguese manufacturing industry where this question remains rather unaddressed. Using profitability, activity, liquidity, leverage, and solvency ratios, it was added the size and age variables, for a group of 208 firms, including 49 bankrupt firms and 159 active firms, during the years 2011 to 2015. The logit model allowed us to estimate a model with 82.3% of predictive capacity. The most important variables identified were profitability, solvency, and size. Estimations only with the data closest to the bankruptcy date improved predictive capacity. It is evidenced that financial and non-financial variables can predict bankruptcy probability. A possible future approach would be to analyze a larger sample. Also, a larger period could be considered, allowing to test either the effects of the 2007/8 crisis or the effects of the recent economic turmoil related to Covid-19. Important for both corporate managers and investors. Conclusions may be disclosed regarding the influence that economic turmoil certainly has on corporate defaults and bankruptcies allowing its extension to other countries. The contribution of this paper is to find the best specification for a bankruptcy prediction model applied to the Portuguese manufacturing industry SMEs. This paper also contributes to the existing literature by using non-financial variables and analyzing a sector still unexplored in Portugal, albeit its conclusions can be extended to other countries.pt_PT
dc.identifier.citationPacheco, L., Madaleno, M., Correia, P. & Maldonado, I. (2022), Probability of corporate bankruptcy: an application to Portuguese manufacturing industry SMEs. International Journal of Business and Society, 23(2), 1169-1189. https://doi.org/10.33736/ijbs.4863.2022. Repositório Institucional UPT. http://hdl.handle.net/11328/4411pt_PT
dc.identifier.doihttps://doi.org/10.33736/ijbs.4863.2022pt_PT
dc.identifier.issn1511-6670
dc.identifier.urihttp://hdl.handle.net/11328/4411
dc.language.isoengpt_PT
dc.peerreviewedyespt_PT
dc.relationThis work was supported by the FCT – Fundação para a Ciência e a Tecnologia, I.P. [Project UIDB/05105/2020]pt_PT
dc.relation.publisherversionhttps://publisher.unimas.my/ojs/index.php/IJBS/article/view/4863pt_PT
dc.rightsopen accesspt_PT
dc.rights.urihttp://creativecommons.org/licenses/by-sa/4.0/pt_PT
dc.subjectBankruptcypt_PT
dc.subjectManufacturing industrypt_PT
dc.subjectSMEspt_PT
dc.subjectLogitpt_PT
dc.subjectFinancial ratiospt_PT
dc.titleProbability of Corporate Bankruptcy: Application to Portuguese Manufacturing Industry SMEspt_PT
dc.typejournal articlept_PT
degois.publication.firstPage1169pt_PT
degois.publication.issue2pt_PT
degois.publication.lastPage1189pt_PT
degois.publication.locationMalásiapt_PT
degois.publication.titleInternational Journal of Business and Societypt_PT
degois.publication.volume23pt_PT
dspace.entity.typePublicationen
person.affiliation.nameREMIT – Research on Economics, Management and Information Technologies
person.familyNamePacheco
person.familyNameMaldonado
person.givenNameLuís Miguel
person.givenNameIsabel
person.identifier.ciencia-idBF16-0EF2-107B
person.identifier.ciencia-id1D1D-3612-D593
person.identifier.orcid0000-0002-9066-6441
person.identifier.orcid0000-0002-1292-6201
person.identifier.ridE-5193-2010
person.identifier.scopus-author-id55945343700
relation.isAuthorOfPublicationa25aba90-4787-45a8-b908-646f24b32dfc
relation.isAuthorOfPublication1d5bf75b-f0ec-4431-aa1e-cfb8be344155
relation.isAuthorOfPublication.latestForDiscoverya25aba90-4787-45a8-b908-646f24b32dfc

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