The Ooghe-Joos-De Vos failure prediction models: a cross-industry validation
AbstractThis study tests the validity of the Belgian Ooghe-Joos-De Vos (1991) failure prediction models (1 and 3 years prior to failure) across 18 different industries and different size classes. Firstly, the performance results and the trade-off functions reveal a wide range of performances for the different industries. However, we notice that the OJD models perform best for the classical manufacturing industries and financial services, while they show the worst performance results for the service industries and the no-industry category. Furthermore, when using new, industry specific cut-off points, the error rates of the models are significantly reduced. Secondly, the OJD model 1 year prior to failure seems to perform best for large companies and companies with complete form annual accounts. Finally, the performance differences between the various subgroups with respect to industry, size class and form of annual account of the model 3 years prior to failure the are much smaller than those of the model 1 year prior to failure.
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Bibliographic InfoPaper provided by Vlerick Leuven Gent Management School in its series Vlerick Leuven Gent Management School Working Paper Series with number 2001-9.
Length: 61 pages
Date of creation: 02 Jan 2002
Date of revision:
Other versions of this item:
- 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.
- G33 - Financial Economics - - Corporate Finance and Governance - - - Bankruptcy; Liquidation
- M49 - Business Administration and Business Economics; Marketing; Accounting - - Accounting - - - Other
This paper has been announced in the following NEP Reports:
- NEP-ALL-2002-12-09 (All new papers)
- NEP-ENT-2002-12-09 (Entrepreneurship)
- NEP-IND-2002-12-09 (Industrial Organization)
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- D. Van Den Poel, 2003. "Predicting Mail-Order Repeat Buying: Which Variables Matter?," Working Papers of Faculty of Economics and Business Administration, Ghent University, Belgium 03/191, Ghent University, Faculty of Economics and Business Administration.
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