Failure prediction of government funded start-up firms

Lukason, Oliver; Käsper, Kaspar

doi:10.21511/imfi.14(2-2).2017.01

Cited by 8 publications

(5 citation statements)

References 40 publications

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“…These analyses show that traditional bankruptcy prediction models failed to predict the financial condition of small businesses. The same author, in cooperation with Lukason (Lukason and Käsper 2017), expanded his research in the field of forecasting bankruptcy risk by considering all start-ups that received government grants in the period [2004][2005][2006][2007][2008][2009][2010][2011][2012][2013]. Upon selection, data were collected for 417 companies, based on which models were built using logistic regression.…”

Section: Estoniamentioning

confidence: 99%

Review of Research into Enterprise Bankruptcy Prediction in Selected Central and Eastern European Countries

Prusak

2018

IJFS

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Abstract:In developed countries, the first studies on forecasting bankruptcy date to the early 20th century. In Central and Eastern Europe, due to, among other factors, the geopolitical situation and the introduced economic system, this issue became the subject of researcher interest only in the 1990s. Therefore, it is worthwhile to analyze whether these countries conduct bankruptcy risk assessments and what their level of advancement is. The main objective of the article is the review and assessment of the level of advancement of bankruptcy prediction research in countries of the former Eastern Bloc, in comparison to the latest global research trends in this area. For this purpose, the method of analyzing scientific literature was applied. The publications chosen as the basis for the research were mainly based on information from the Google Scholar and ResearchGate databases during the period Q4 2016-Q3 2017. According to the author's knowledge, this is the first such large-scale study involving the countries of the former Eastern Bloc-which includes the following states: Poland, Lithuania, Latvia, Estonia, Ukraine, Hungary, Russia, Slovakia, Czech Republic, Romania, Bulgaria, and Belarus. The results show that the most advanced research in this area is conducted in the Czech Republic, Poland, Slovakia, Estonia, Russia, and Hungary. Belarus Bulgaria and Latvia are on the other end. In the remaining countries, traditional approaches to predicting business insolvency are generally used.

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Section: Estoniamentioning

confidence: 99%

Review of Research into Enterprise Bankruptcy Prediction in Selected Central and Eastern European Countries

Prusak

2018

IJFS

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“…Thus, for instance, for export support agencies, it would be especially important to detect which firms would internationalize fast, and to support such firms. Still, extant research indicates that funding decisions can be associated with high failure rates [25], [26].…”

Section: Introductionmentioning

confidence: 99%

How Does Managerial Experience Predict the Internationalization Type of a Young Firm?

2021

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This study aims to find out how useful managers' past general and export experience is in predicting whether young manufacturing firms become fast internationalizers. Extant literature about the role of managerial experience in determining young firms' internationalization type is scant. This paper fills this gap by providing systematic evidence on which kinds of general and export experience can be used for accurate predictions of two firm types: born globals and general fast internationalizers. Our dataset encompasses information about managerial experience of the whole population of young Estonian manufacturing firms. Based on using four different prediction methods (logistic regression, rough sets, decision tree, neural networks) and a large variety of variables reflecting managers' past experience, the results indicate that in prediction models, export experience variables are more valuable than general experience variables. Born globals can be predicted with an accuracy of at least 90% in case of all applied machine learning methods, while the precision is lower in case of general fast internationalizers. The study leads to important implications for international business theory and practice.

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“…In turn, FR-Pattern 1 firms were not subject to any remarkable liabilities concerning their financial indicators, which enables to hypothesize that in a financial sense, around half of the young exporters could be characterized with the term "born to survive" (in contrast to "born dead" firms in . Based on values of financial ratios, FR-Pattern 1 firms were more viable during the post-foundation time than an average Estonian young firm, when compared with Lukason and Käsper (2017). In addition, the same argument holds when comparing the ratio values with the same figures with an average European SME in a population of 5.75 million firms (Altman et al, 2017).…”

Section: Failure Risk Patternsmentioning

confidence: 73%

“…Since D' Aveni (1989), studies about failure risk patterns have mostly concentrated on older firms. Only a few studies Lukason and Käsper, 2017) have recently focused on young firms' failure risk patterns. These studies have concluded that the performance of most new ventures is modest, while very poor or very successful firms form a minority, but failing or surviving young firms are not well distinguishable based on their financial performance.…”

Section: Rq1 Which Internationalization Patterns (I-patterns) Exist Among Young Exporters?mentioning

confidence: 99%

Internationalization and failure risk patterns

Lukason

Vissak

2019

RIBS

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Purpose This paper aims to find out what kind of export and failure risk patterns exist among young Estonian manufacturing exporters and explore their interlinkages. Design/methodology/approach The sample consisted of 208 young Estonian manufacturing exporters. Based on internationalization literature, export patterns were detected with a consecutive three-stage clustering of export sales share from total sales, outside-Europe sales share from export sales and number of target markets, while failure risk patterns were detected by clustering failure probabilities obtained from a universal prediction model. The interconnection of export patterns with financial ratios and failure risk patterns was studied with statistical tests. Findings Six main internationalization patterns existed. In all, 49 per cent of firms exported to a single European market and their export share was constantly very low, while even most of the firms with high export shares (39 per cent of the sample) were also active on one European market. In terms of failure risk patterns, 49 per cent of firms had constantly very low failure risk, while 51 per cent of firms had medium risk. Higher export engagement did not lead to better financial performance or lower failure risk. Originality/value This study is the first to find out if firms following different export patterns are also characterized by specific financial performance and failure risk. In addition, studies encompassing young exporters’ specific target markets and failure risk development are rare. While exporters’ and non-exporters’ financial performance differences have been frequently documented in favor of the former, this study found no such differences for different types of young exporters.

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Failure prediction of government funded start-up firms

Cited by 8 publications

References 40 publications

Review of Research into Enterprise Bankruptcy Prediction in Selected Central and Eastern European Countries

Review of Research into Enterprise Bankruptcy Prediction in Selected Central and Eastern European Countries

How Does Managerial Experience Predict the Internationalization Type of a Young Firm?

Internationalization and failure risk patterns

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