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Spatial autocorrelation and clusters in modelling corporate bankruptcy of manufacturing firms

Author

Listed:
  • M. Simona Andreano

    (Universitas Mercatorum)

  • Roberto Benedetti

    (University of Chieti-Pescara)

  • Andrea Mazzitelli

    (Universitas Mercatorum)

  • Federica Piersimoni

    (Italian National Statistical Institute)

Abstract

The interest in the prediction of firms’ bankruptcy is increasing in the recent recession period 2008–2012, when, in Italy, the number of distressed manufacturing firms increased sharply. The most popular model applied by bankruptcy researchers is the logit model (logistic regression model). In the present paper we extend this classical model in two different ways, to take into account the spatial effects that can highly affect bankruptcy probability. We propose to apply the spatial Autologistic model and the Logit Regression Tree, with the aim to find evidence of spatial dependence and spatial heterogeneity in bankruptcy probability, of the manufacturing firms of Prato and Florence (Italy). Our application shows that spatial contagion effects are an important issue when modelling bankruptcy probability. Moreover, the application of the regression tree analysis shows the presence of three different clusters, with heterogeneous behaviours.

Suggested Citation

  • M. Simona Andreano & Roberto Benedetti & Andrea Mazzitelli & Federica Piersimoni, 2018. "Spatial autocorrelation and clusters in modelling corporate bankruptcy of manufacturing firms," Economia e Politica Industriale: Journal of Industrial and Business Economics, Springer;Associazione Amici di Economia e Politica Industriale, vol. 45(4), pages 475-491, December.
    • Handle: RePEc:spr:epolin:v:45:y:2018:i:4:d:10.1007_s40812-018-0097-x
    DOI: 10.1007/s40812-018-0097-x
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    Cited by:

    1. Manuel Rico & Santiago Cantarero & Francisco Puig, 2021. "Regional Disparities and Spatial Dependence of Bankruptcy in Spain," Mathematics, MDPI, vol. 9(9), pages 1-20, April.

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    More about this item

    Keywords

    Default probability; Autologistic model; Heterogeneity; Spatial dependence;
    All these keywords.

    JEL classification:

    • C13 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods and Methodology: General - - - Estimation: General
    • C21 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Cross-Sectional Models; Spatial Models; Treatment Effect Models
    • C54 - Mathematical and Quantitative Methods - - Econometric Modeling - - - Quantitative Policy Modeling
    • R12 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Size and Spatial Distributions of Regional Economic Activity; Interregional Trade (economic geography)

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