IDEAS home Printed from
MyIDEAS: Login to save this article or follow this journal

Business failure prediction using decision trees

  • Adrian Gepp

    (School of Business, Bond University, Gold Coast, Queensland, Australia)

  • Kuldeep Kumar

    (School of Business, Bond University, Gold Coast, Queensland, Australia)

  • Sukanto Bhattacharya

    (Deakin Business School, Deakin University, Burwood, Victoria, Australia)

Registered author(s):

    Accurate business failure prediction models would be extremely valuable to many industry sectors, particularly financial investment and lending. The potential value of such models is emphasised by the extremely costly failure of high-profile companies in the recent past. Consequently, a significant interest has been generated in business failure prediction within academia as well as in the finance industry. Statistical business failure prediction models attempt to predict the failure or success of a business. Discriminant and logit analyses have traditionally been the most popular approaches, but there are also a range of promising non-parametric techniques that can alternatively be applied. In this paper, the relatively new technique of decision trees is applied to business failure prediction. The numerical results suggest that decision trees could be superior predictors of business failure as compared to discriminant analysis. Copyright © 2009 John Wiley & Sons, Ltd.

    If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.

    File URL:
    File Function: Link to full text; subscription required
    Download Restriction: no

    Article provided by John Wiley & Sons, Ltd. in its journal Journal of Forecasting.

    Volume (Year): 29 (2010)
    Issue (Month): 6 ()
    Pages: 536-555

    in new window

    Handle: RePEc:jof:jforec:v:29:y:2010:i:6:p:536-555
    Contact details of provider: Web page:

    No references listed on IDEAS
    You can help add them by filling out this form.

    This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

    When requesting a correction, please mention this item's handle: RePEc:jof:jforec:v:29:y:2010:i:6:p:536-555. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Wiley-Blackwell Digital Licensing)

    or (Christopher F. Baum)

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If references are entirely missing, you can add them using this form.

    If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    This information is provided to you by IDEAS at the Research Division of the Federal Reserve Bank of St. Louis using RePEc data.