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Corporate failure prediction in the European energy sector: A multicriteria approach and the effect of country characteristics

Author

Listed:
  • Michalis Doumpos

    (Technical University of Crete [Chania])

  • Kostas Andriosopoulos

    (ESCP Europe)

  • Emilios Galariotis

    (Audencia Business School - Audencia Business School)

  • Georgia Makridou
  • Constantin Zopounidis

    (Technical University of Crete [Chania])

Abstract

This study examines the development of corporate failure prediction models for European firms in the energy sector, using a large dataset from 18 countries. The construction of the models is based on a multiple criteria decision aid (MCDA) approach taking into account both ordinal criteria and nominal country-sector effects. The analysis is based on different modeling specifications. First, traditional financial variables are examined, which are then extended with additional country-level data related to the economic and business environment, as well as data about the energy efficiency policies of the countries and the characteristics of their energy markets and networks. The results indicate that energy-related attributes have high discriminating power and add valuable information compared to the other attributes.

Suggested Citation

  • Michalis Doumpos & Kostas Andriosopoulos & Emilios Galariotis & Georgia Makridou & Constantin Zopounidis, 2017. "Corporate failure prediction in the European energy sector: A multicriteria approach and the effect of country characteristics," Post-Print hal-01578092, HAL.
  • Handle: RePEc:hal:journl:hal-01578092 DOI: 10.1016/j.ejor.2017.04.024 Note: View the original document on HAL open archive server: http://hal-audencia.archives-ouvertes.fr/hal-01578092
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