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Insolvency prediction for Portuguese agro-industrial SME: Tree Bagging Methodology

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  • Canto, José Augusto
  • Silva, Amélia Cristina Ferreira
  • Leite, Gabriela
  • Machado-Santos, Carlos

Abstract

The aim of this study lies on the empirical application of the tree bagging methodology, in order to predict the insolvency of Portuguese Small and Medium-sized Enterprises (SME) in the agro-industrial sector, one year in advance. The database consists of financial indicators of 243 companies, available at SABI (Iberian Balance Analysis System), all from agro-industrial sector. The proposed model reveals a robust result when compared with traditional parametric models. The results show that two indicators – “short-term liquidity” and “capacity to generate results appropriate to the size” – were the most statistically relevant, both in the Proposed Model and the Logistic Regression model.

Suggested Citation

  • Canto, José Augusto & Silva, Amélia Cristina Ferreira & Leite, Gabriela & Machado-Santos, Carlos, 2019. "Insolvency prediction for Portuguese agro-industrial SME: Tree Bagging Methodology," Agricultural Economics Review, Greek Association of Agricultural Economists, vol. 0(Issue 2).
    • Handle: RePEc:ags:aergaa:330639
    DOI: 10.22004/ag.econ.330639
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    References listed on IDEAS

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