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Financial Distress in European Vineyards and Olive Groves

Author

Listed:
  • Mário S. Céu
  • Raquel M. Gaspar

Abstract

This study focuses on the prediction of financial distress of agricultural firms operating in the vineyards and olive crops sectors in Mediterranean countries, specifically in Portugal, Spain, and Italy, which are considered to be crucial for the production of these crops. The sample size of the study is 5,057 firms. Twelve models are presented, estimated from subsamples of combinations between countries and crops. Logistic regression is used for the estimation of these models. The accuracy of the models is evaluated, taking into account the importance of misclassification costs. Additionally, the areas under the ROC curves are calculated and compared in a dynamic of possible combinations between crops and countries. The study concludes that there are differences between the two sectors, as well as across countries, and suggests that dedicated models for each country or crop may improve the the models’ accuracy.

Suggested Citation

  • Mário S. Céu & Raquel M. Gaspar, 2023. "Financial Distress in European Vineyards and Olive Groves," Working Papers REM 2023/0266, ISEG - Lisbon School of Economics and Management, REM, Universidade de Lisboa.
    • Handle: RePEc:ise:remwps:wp02662023
    as

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    File URL: https://rem.rc.iseg.ulisboa.pt/wps/pdf/REM_WP_0266_2023.pdf
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    References listed on IDEAS

    as
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    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    agriculture; financial distress; prediction models; ROC curves;
    All these keywords.

    JEL classification:

    • G24 - Financial Economics - - Financial Institutions and Services - - - Investment Banking; Venture Capital; Brokerage
    • G33 - Financial Economics - - Corporate Finance and Governance - - - Bankruptcy; Liquidation

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