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Cross-Country Application of Manufacturing Failure Models

Author

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  • Sebastian Klaudiusz Tomczak

    (Department of Operations Research and Business Intelligence, Wrocław University of Science and Technology, Wybrzeże Wyspiańskiego 27, 50-370 Wrocław, Poland)

  • Piotr Staszkiewicz

    (Collegium of Business Administration, SGH Warsaw School of Economics, al. Niepodległości 162, 02-554 Warsaw, Poland)

Abstract

The post-Altman models suffer from moral amortization. This paper asks whether models developed in one country can be applied in other economies. One of the characteristics of the prediction model is that a date drives the estimation. Thus, the estimated model based on one economy is not necessarily applicable to other economies. To verify such a statement, we carried out a literature review to identify the manufacturing models constructed during the last 30 years that were reported in reputable scientific journals. Our literature comprised 75 papers, and with the application of the citation count and citation mining, we selected a sample and traced the selected papers to the cross-country application. Our results indicated an existing gap in the cross-economy validation of existing manufacturing models. Our study has implications for policy, as the application of the prediction models to cross-economies’ consolidated financial statements is biased.

Suggested Citation

  • Sebastian Klaudiusz Tomczak & Piotr Staszkiewicz, 2020. "Cross-Country Application of Manufacturing Failure Models," JRFM, MDPI, vol. 13(2), pages 1-10, February.
    • Handle: RePEc:gam:jjrfmx:v:13:y:2020:i:2:p:34-:d:322010
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    References listed on IDEAS

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    Cited by:

    1. Fatma Bulut Sürdü & Arzu Özsözgün Çalışkan & Emel Esen, 2020. "Human Resource Disclosures in Corporate Annual Reports of Insurance Companies: A Case of Developing Country," Sustainability, MDPI, vol. 12(8), pages 1-20, April.
    2. Iman Harymawan & Fajar Kristanto Gautama Putra & Bayu Arie Fianto & Wan Adibah Wan Ismail, 2021. "Financially Distressed Firms: Environmental, Social, and Governance Reporting in Indonesia," Sustainability, MDPI, vol. 13(18), pages 1-18, September.
    3. Piotr Staszkiewicz & Aleksander Werner, 2021. "Reporting and Disclosure of Investments in Sustainable Development," Sustainability, MDPI, vol. 13(2), pages 1-15, January.
    4. Sebastian Klaudiusz Tomczak, 2023. "General bankruptcy prediction models for the Visegrád Group. The stability over time," Operations Research and Decisions, Wroclaw University of Science and Technology, Faculty of Management, vol. 33(4), pages 171-187.

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