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AI-Based Bankruptcy Prediction for Agricultural Firms in Central and Eastern Europe

Author

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  • Dominika Gajdosikova

    (Department of Economics, Faculty of Operation and Economics of Transport and Communications, University of Zilina, Univerzitna 1, 01026 Zilina, Slovakia)

  • Jakub Michulek

    (Department of Economics, Faculty of Operation and Economics of Transport and Communications, University of Zilina, Univerzitna 1, 01026 Zilina, Slovakia)

  • Irina Tulyakova

    (Department of Economics & Economic Policy, Faculty of Economics, Saint Petersburg State University, University Embankment 7-9, 199034 St. Petersburg, Russia)

Abstract

The agriculture sector is increasingly challenged to maintain productivity and sustainability amidst environmental, marketplace, and geopolitical pressures. While precision agriculture enhances physical production, the financial resilience of agricultural firms has been understudied. In this study, machine learning (ML) methods, including logistic regression (LR), decision trees (DTs), and artificial neural networks (ANNs), are employed to predict the bankruptcy risk for Central and Eastern European (CEE) farming firms. All models consistently showed high performance, with AUC values exceeding 0.95. DTs had the highest overall accuracy (95.72%) and F1 score (0.9768), LR had the highest recall (0.9923), and ANNs had the highest discrimination power (AUC = 0.960). Visegrad, Balkan, Baltic, and Eastern Europe subregional models featured economic and structural heterogeneity, reflecting the need for local financial risk surveillance. The results support the development of AI-based early warning systems for agricultural finance, enabling smarter decision-making, regional adaptation, and enhanced sustainability in the sector.

Suggested Citation

  • Dominika Gajdosikova & Jakub Michulek & Irina Tulyakova, 2025. "AI-Based Bankruptcy Prediction for Agricultural Firms in Central and Eastern Europe," IJFS, MDPI, vol. 13(3), pages 1-35, July.
    • Handle: RePEc:gam:jijfss:v:13:y:2025:i:3:p:133-:d:1703225
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