Mixed logistic model with two independent random coefficients for financial crisis prediction: Argentinean companies

FERNANDO GARCIA

International Journal of Accounting and Finance

Inderscience Enterprises Ltd.

Año: 2020 vol. 10 p. 17 - 17

1752-8224

he paper develops a mixed logistic financial distress predictionmodel with two independent random coefficients and validates it for publicArgentinean companies. This study complements existing literature onbankruptcy prediction in emerging economies advancing the application ofcontemporary econometric methods (Caro et al., 2013). Anticipatingbankruptcy risks increases portfolios? profitability. Emerging economies andfrontier markets differ from developed economies in political, cultural, socialand institutional terms. Given those differences, investors and lenders needspecific bankruptcy and financial distress prediction models. The modeldeveloped achieves an excellent performance using financial statements fromfirms listed in the Buenos Aires Stock Exchange during 1993?2000 with ratiosaccepted in the literature (Altman, 1993; Jones and Hensher, 2004). Resultsshow that profitability, assets turnover and cash flow from operations reducethe likelihood of financial distress while leverag