IDEAS home Printed from https://ideas.repec.org/a/wsi/rpbfmp/v06y2003i01ns0219091503000980.html
   My bibliography  Save this article

Credit Evaluation for Small and Medium-sized Enterprises by the Examination of Firm-specific Financial Ratios and Non-financial Variables: Evidence from Taiwan

Author

Listed:
  • Hsien-Chang Kuo

    (Department of Banking and Finance, National Chi-Nan University, 1, University Rd., Puli, Nantou 545 Taiwan, R.O.C.)

  • Lie-Huey Wang

    (Department of Finance, Ming Chuan University, R.O.C.)

  • Her-Jiun Sheu

    (Department of Banking and Finance/Department of Management Science, National Chi-Nan University/National Chiao-Tung University, R.O.C.)

  • Fa-Kuang Li

    (Small Business Bank of Taiwan, R.O.C.)

Abstract

A credit evaluation model for SMEs in Taiwan based on the characteristics of financial as well as non-financial data is proposed in this paper. While most financial distress prediction models use financial ratios as predictive variables, this study also integrates non-financial data as predictive variables. Kuo and Li (1999) proposed that certain firm-specific financial ratios have informational content. Moreover, the introduction of non-financial variables does enhance the model's discrimination power. The proposed credit evaluation model makes it easier to classify successful or failed SMEs.

Suggested Citation

  • Hsien-Chang Kuo & Lie-Huey Wang & Her-Jiun Sheu & Fa-Kuang Li, 2003. "Credit Evaluation for Small and Medium-sized Enterprises by the Examination of Firm-specific Financial Ratios and Non-financial Variables: Evidence from Taiwan," Review of Pacific Basin Financial Markets and Policies (RPBFMP), World Scientific Publishing Co. Pte. Ltd., vol. 6(01), pages 5-20.
    • Handle: RePEc:wsi:rpbfmp:v:06:y:2003:i:01:n:s0219091503000980
    DOI: 10.1142/S0219091503000980
    as

    Download full text from publisher

    File URL: http://www.worldscientific.com/doi/abs/10.1142/S0219091503000980
    Download Restriction: Access to full text is restricted to subscribers
    File URL: https://libkey.io/10.1142/S0219091503000980?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Hui Hu & Milind Sathye, 2015. "Predicting Financial Distress in the Hong Kong Growth Enterprises Market from the Perspective of Financial Sustainability," Sustainability, MDPI, vol. 7(2), pages 1-15, January.
    2. Charlie X. Cai & Paul B. McGuinness & Qi Zhang, 2018. "Credit scores and the performance of newly-listed stocks: an exploration of the Chinese A-share market," Review of Quantitative Finance and Accounting, Springer, vol. 51(1), pages 79-111, July.
    3. Selcuk Caner & Mehmet Baha Karan, 2012. "Screening Creditworthiness of SME's: The Case of Small Business Assistance in Turkey," Multinational Finance Journal, Multinational Finance Journal, vol. 16(1-2), pages 1-20, March - J.

    More about this item

    Keywords

    Credit evaluation; Firm-specific financial ratios; Non-financial variables;
    All these keywords.

    JEL classification:

    • G1 - Financial Economics - - General Financial Markets
    • G2 - Financial Economics - - Financial Institutions and Services
    • G3 - Financial Economics - - Corporate Finance and Governance

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:wsi:rpbfmp:v:06:y:2003:i:01:n:s0219091503000980. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Tai Tone Lim (email available below). General contact details of provider: http://www.worldscinet.com/rpbfmp/rpbfmp.shtml .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.