Prediction of Corporate Failures for Small and Medium-Sized Enterprises in Europe

Abstract

The risk of bankruptcy is naturally faced by all corporate organizations, and there are various factors that may lead an organization to bankruptcy, including microeconomic and macroeconomic ones. Many researchers have studied the prediction of business bankruptcy risk in recent decades. However, the research on better tools continues to evolve, utilizing new methodologies from various scientific fields of management science and computer science. This chapter deals with the development of statistical and artificial intelligence methodologies for predicting failures for small and medium-sized enterprises, considering financial and macroeconomic data. Empirical results are presented for a large sample of European firms.