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Modelling financial distress of Russian industrial companies, or What bankruptcy analysis can tell
https://doi.org/10.32609/0042-8736-2019-3-101-118
Abstract
We develop an econometric method for estimating risks of financial distress among Russian industrial companies. It deals with international experience in the field of financial stability analysis as well as with the features of Russian data, including the following two. Firstly, bankruptcy is a rare event in the sample of Russian industrial companies. Secondly, not all of the companies become bankrupt by economic reasons. At the same time, not all of the companies that face financial problems become bankrupt. We have tried the developed method using a wide sample of Russian companies (appr. 97 000 firms a year, more than a million firms all in all). As a result, the method shows a significant shift in the ability of the model to predict financial distress risks in comparison to other suitable methods. Results and conclusions made in the paper can help clarify anti-crisis macroeconomic policy as well as reveal Russian industries to focus on.
Keywords
financial stability,
bankruptcy,
Russian industrial companies,
unobservable distress,
logit-analysis
JEL: C25; C46; C51; E32; G32; G33
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For citations:
Mogilat A.N. Modelling financial distress of Russian industrial companies, or What bankruptcy analysis can tell. Voprosy Ekonomiki. 2019;(3):101-118. (In Russ.) https://doi.org/10.32609/0042-8736-2019-3-101-118
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