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Foremost features affecting financial distress and Bankruptcy in the acute stage of COVID-19 crisis

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  • İbrahim Bozkurt
  • Muhammed Veysel Kaya

Abstract

This paper investigates the foremost firm-specific factors having an impact on financial distress and bankruptcy in the acute stage of the Covid-19 crisis based on data from approximately 9,000 enterprises in 25 countries. Empirical results of a random forest algorithm with SHAP values show increased odds of both bankruptcy and financial distress for firms that have problems in accessing finance, younger firms and more indebted firms. In addition, the size of the firm and the years of experience of its managers also have an impact on financial failure. However, country features are more important than firm features in predicting bankruptcy and financial distress in the Covid-19 crisis.

Suggested Citation

  • İbrahim Bozkurt & Muhammed Veysel Kaya, 2023. "Foremost features affecting financial distress and Bankruptcy in the acute stage of COVID-19 crisis," Applied Economics Letters, Taylor & Francis Journals, vol. 30(8), pages 1112-1123, May.
    • Handle: RePEc:taf:apeclt:v:30:y:2023:i:8:p:1112-1123
    DOI: 10.1080/13504851.2022.2036681
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    Cited by:

    1. Eleonora Cutrini & Federico Ninivaggi, 2024. "Pandemic crisis and firm survival: evidence from the Italian manufacturing industry," Economia e Politica Industriale: Journal of Industrial and Business Economics, Springer;Associazione Amici di Economia e Politica Industriale, vol. 51(2), pages 265-297, June.
    2. Gajdosikova Dominika & Valaskova Katarina, 2023. "Bankruptcy Prediction Model Development and its Implications on Financial Performance in Slovakia," Economics and Culture, Sciendo, vol. 20(1), pages 30-42, June.

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