{"title":"Firm failure prediction for small and medium-sized enterprises and new ventures","authors":"Weiyu Wang, Maria João Guedes","doi":"10.1007/s11846-024-00742-4","DOIUrl":null,"url":null,"abstract":"<p>New ventures and small and medium-sized enterprises (SMEs) are the engines that drive the development of the economy, productivity, and business. However, they differ with respect to their natures, and that may affect their choices and success. This paper investigates the determinants of failure for SMEs and new ventures in Portugal by employing a logistic regression technique to develop the one-year prediction models individually over the period from 2010 to 2018. The results show that age and size always play significant roles in discriminating the failure risk of both types of firm, but the financial predictors selected in the final default prediction models for SMEs and new ventures vary. Moreover, based on financial, age, and size predictors, the SME model performs much better than that of the new venture in the classification accuracy reported. This indicates that separate treatment should be carried out while predicting the failure likelihood of SMEs and new ventures.</p>","PeriodicalId":20992,"journal":{"name":"Review of Managerial Science","volume":"20 1","pages":""},"PeriodicalIF":7.8000,"publicationDate":"2024-03-08","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":"0","resultStr":null,"platform":"Semanticscholar","paperid":null,"PeriodicalName":"Review of Managerial Science","FirstCategoryId":"91","ListUrlMain":"https://doi.org/10.1007/s11846-024-00742-4","RegionNum":3,"RegionCategory":"管理学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":null,"EPubDate":"","PubModel":"","JCR":"Q1","JCRName":"MANAGEMENT","Score":null,"Total":0}
引用次数: 0
Abstract
New ventures and small and medium-sized enterprises (SMEs) are the engines that drive the development of the economy, productivity, and business. However, they differ with respect to their natures, and that may affect their choices and success. This paper investigates the determinants of failure for SMEs and new ventures in Portugal by employing a logistic regression technique to develop the one-year prediction models individually over the period from 2010 to 2018. The results show that age and size always play significant roles in discriminating the failure risk of both types of firm, but the financial predictors selected in the final default prediction models for SMEs and new ventures vary. Moreover, based on financial, age, and size predictors, the SME model performs much better than that of the new venture in the classification accuracy reported. This indicates that separate treatment should be carried out while predicting the failure likelihood of SMEs and new ventures.
期刊介绍：
Review of Managerial Science (RMS) provides a forum for innovative research from all scientific areas of business administration. The journal publishes original research of high quality and is open to various methodological approaches (analytical modeling, empirical research, experimental work, methodological reasoning etc.). The scope of RMS encompasses – but is not limited to – accounting, auditing, banking, business strategy, corporate governance, entrepreneurship, financial structure and capital markets, health economics, human resources management, information systems, innovation management, insurance, marketing, organization, production and logistics, risk management and taxation. RMS also encourages the submission of papers combining ideas and/or approaches from different areas in an innovative way. Review papers presenting the state of the art of a research area and pointing out new directions for further research are also welcome. The scientific standards of RMS are guaranteed by a rigorous, double-blind peer review process with ad hoc referees and the journal´s internationally composed editorial board.
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