Financial performance in manufacturing firms: a comparison between parametric and non parametric approaches

Maurizio Luigi Baussola, Eleonora Bartoloni

Risultato della ricerca: Working paper

Abstract

This paper provides a methodological analysis of credit risk in manufacturing firms by using two different credit scoring approaches . The first is the traditional discriminant approach (DA) for bankruptcy prediction based on a logistic regression model, whereas the second, Data Envelopment Analysis (DEA), is a non-parametric approach for measuring firms’ efficiency which does not require ex-ante information on bankrupted firms. By using a manufacturing sample of both healthy and bankrupted firms during the period 2003-2009 we provide an indepth comparison of DA and DEA and conclude that a correct evaluation of firms’ credit worthiness is the result of successive fine tuning procedures requiring the use of multiple methodological tools.
Lingua originaleEnglish
Numero di pagine33
Stato di pubblicazionePubblicato - 2012

Keywords

  • Bankruptcy
  • Credit rating
  • Data Envelopment
  • Discriminant Analysis

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