“…In this paper we use a structured additive regression model to analyze how a firm's age interacts with its accounting‐based key performance indicators and how this interaction affects the prediction of bankruptcy. A number of studies have applied GAMs to examine creditworthiness (Alp et al, ; Burkhard & de Giorgi, ) and bankruptcy prediction (Berg, ; Cheng, Chu, & Hwang, ; Dakovic, Czado, & Berg, ; Hwang, Cheng, & Lee, ; Lohmann & Ohliger, , ). However, these studies focus on comparing several empirical models from a strictly statistical perspective and do not analyze or describe existing interaction effects between a firm's age and its accounting‐based key performance indicators.…”