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On the Role of Industry-Level Structural Constraints and the Timing of Accounting Reports in Bankruptcy Predictions

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dc.affiliation.dptoUC3M. Departamento de Economía de la Empresaes
dc.contributor.authorChiu, Wan-Chien
dc.contributor.authorPeña, Juan Ignacio
dc.contributor.authorWang, Chih-Wei
dc.date.accessioned2012-11-07T13:24:21Z
dc.date.available2012-11-07T13:24:21Z
dc.date.issued2011-07
dc.description.abstractThis study uses a hazard model with data on 3392 corporate bankruptcies by U.S. public companies during 1983–2008 to determine the effect of industry-based structural constraints on bankruptcy predictions. The probability of bankruptcy is significantly higher for firms in highly concentrated industries and with relatively stronger customer dependency. Most bankruptcy predictions reflect the variation of a firm’s characteristics relative to its industry, but industry-specific characteristics have negligible impacts. The investigation also includes a comparison of the relative performance of accounting and market-based variables, in terms of both in-sample fit and out-of-sample forecasting accuracy. For yearly data, the best model includes both accounting and market-based variables. However, for monthly market data and quarterly accounting reports, the best model features only market data. The usefulness of accounting measures in bankruptcy prediction models thus may be contingent on sampling frequency.
dc.description.sponsorshipWe acknowledge financial support from MCI grant ECO2009-12551.
dc.format.mimetypeapplication/pdf
dc.identifier.urihttps://hdl.handle.net/10016/15832
dc.language.isoeng
dc.publisherSSRN
dc.relation.ispartofseriesSSRN working paper series
dc.relation.ispartofseriesoct 2012
dc.relation.publisherversionhttp://dx.doi.org/10.2139/ssrn.1882010
dc.rightsAtribución-NoComercial-SinDerivadas 3.0 España
dc.rights.accessRightsopen access
dc.rights.urihttp://creativecommons.org/licenses/by-nc-nd/3.0/es/
dc.subject.ecienciaEmpresa
dc.subject.otherBankruptcy prediction
dc.subject.otherIndustry effects
dc.subject.otherMarket and accounting variables
dc.titleOn the Role of Industry-Level Structural Constraints and the Timing of Accounting Reports in Bankruptcy Predictions
dc.typeworking paper*
dc.type.hasVersionSMUR*
dspace.entity.typePublication
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