An Empirical Evaluation of Sampling Controversies in Ratio-Based Modelling of Corporate Collapse
Journal of Applied Research in Accounting and Finance (JARAF), Vol. 2, No. 2, pp. 15-26, 2007
16 Pages Posted: 6 Feb 2008
Empirical investigations regarding ratio-based modelling of corporate collapse have been on going for decades. With any study of an empirical nature, a data sample is a necessary prerequisite. It allows testing the performance of the prediction model, thereby establishing its practical relevance. However, it is necessary to first ensure that the data sample used satisfies certain conditions, and these have lead to some choice controversies. This paper considers the controversial issues that arise in data sampling, provides a critical evaluation of these issues, and makes choice recommendations on the controversial aspects, by empirically examining the literature.
Keywords: corporate collapse, bankruptcy prediction
JEL Classification: M41, G33, C10
Suggested Citation: Suggested Citation