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Predictors of firm default: Empirical evidence based on a multi-theoretical framework

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  • Andresson, Art
  • Lukason, Oliver

Abstract

This study focuses on finding novel accurate predictors of firm default. A multi-theoretical framework covering managerial- and firm-level behaviour domains is developed, which is tested on the Estonian population of (non-)defaulted micro-, small- and medium-sized firms with 17 variables. Out of the variables, those portraying the earlier managerial behaviour in entrepreneurship are the most accurate. The final model inclusive of all variables achieves an excellent area under the curve of 0.947. The empirical part is finalized with the composition of a taxonomy of (non-)defaulted firms.

Suggested Citation

  • Andresson, Art & Lukason, Oliver, 2025. "Predictors of firm default: Empirical evidence based on a multi-theoretical framework," Finance Research Letters, Elsevier, vol. 86(PD).
    • Handle: RePEc:eee:finlet:v:86:y:2025:i:pd:s1544612325019142
    DOI: 10.1016/j.frl.2025.108660
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