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The Ooghe-Joos-De Vos failure prédiction models: a cross-industry validation

Author

Listed:
  • Hubert Ooghe
  • Sofie Balcaen
  • Jan Camerlynck

Abstract

This study compares the predictive performances of the Ooghe-Joos-De Vos models across different industries and subgroups concerning size-class and annual accounts form. Type I, type II and unweighted error rates, Gini-coefficients and trade-off functions are analysed. The results indicate a wide variety of performances for the different subgroups. Firstly, both OJD models seem to perform best for the classical manufacturing industries, while they are poorer predictors for the service industries. Secondly, the short-term OJD model has the best predictive abilities for large companies and companies with a complete annual accounts form. In general, the performance differences of the short-term model are much larger than those of the medium-term model and, on average, the medium-term model shows a lower classification accuracy than the short-term model due to a stronger tendency to misclassify non-failing firms as failing.

Suggested Citation

  • Hubert Ooghe & Sofie Balcaen & Jan Camerlynck, 2003. "The Ooghe-Joos-De Vos failure prédiction models: a cross-industry validation," Brussels Economic Review, ULB -- Universite Libre de Bruxelles, vol. 46(1), pages 39-70.
    • Handle: RePEc:bxr:bxrceb:y:2003:v:46:i:1:p:39-70
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    Cited by:

    1. D. Van den Poel, 2003. "Predicting Mail-Order Repeat Buying. Which Variables Matter?," Review of Business and Economic Literature, KU Leuven, Faculty of Economics and Business (FEB), Review of Business and Economic Literature, vol. 0(3), pages 371-404.
    2. DE CLEYN, Sven & BRAET, Johan, 2006. "The evolution and performance of spin-off ventures: Integration and elaboration of existing models," Working Papers 2006031, University of Antwerp, Faculty of Business and Economics.
    3. Balcaen, Sofie & Ooghe, Hubert, 2006. "35 years of studies on business failure: an overview of the classic statistical methodologies and their related problems," The British Accounting Review, Elsevier, vol. 38(1), pages 63-93.

    More about this item

    Keywords

    failure prédiction model; validation; performance measures; industry; size;
    All these keywords.

    JEL classification:

    • G33 - Financial Economics - - Corporate Finance and Governance - - - Bankruptcy; Liquidation
    • M49 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Accounting - - - Other

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