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SMEs’ insolvency analysis in Romania in the year 2010. A microeconomic logistic approach

Author

Listed:
  • Marusa Beca

    (The Bucharest University of Economic Studies)

  • Irina Maria Dragan

    (The Bucharest University of Economic Studies)

Abstract

In this article we study the relationship between microeconomic factors (financial ratios) and SMEs’ insolvencies in Romania using logistic regression model to predict the likelihood of SMEs bankruptcy in the aftermath of the financial and economic crisis. We conducted a logit econometric model for each size category of SMEs (micro, small and medium). The main finding is that the return on assets (ROA) and total debt ratio (TDR) across the three size categories of SMEs are the statistically significant key indicators for the SMEs insolvencies. The best logistic model is the one for small firms because the number of fair estimations represents 80.6%.

Suggested Citation

  • Marusa Beca & Irina Maria Dragan, 2015. "SMEs’ insolvency analysis in Romania in the year 2010. A microeconomic logistic approach," Romanian Statistical Review Supplement, Romanian Statistical Review, vol. 63(8), pages 58-73, August.
    • Handle: RePEc:rsr:supplm:v:63:y:2015:i:8:p:58-73
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    References listed on IDEAS

    as
    1. MOSCALU Maricica, 2012. "Business Failure Prediction For Romanian Smes Using Multivariate Discriminant Analysis," Revista Economica, Lucian Blaga University of Sibiu, Faculty of Economic Sciences, vol. 0(4), pages 457-466.
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      More about this item

      Keywords

      Insolvency; SME; logit; financial ratios; Romania;
      All these keywords.

      JEL classification:

      • C31 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Cross-Sectional Models; Spatial Models; Treatment Effect Models; Quantile Regressions; Social Interaction Models
      • C58 - Mathematical and Quantitative Methods - - Econometric Modeling - - - Financial Econometrics
      • G01 - Financial Economics - - General - - - Financial Crises
      • G33 - Financial Economics - - Corporate Finance and Governance - - - Bankruptcy; Liquidation

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