Frontiers in Finance and Economics is a UGC APPROVED International Journal of Research

Multicriteria Framework for the Prediction of Corporate Failure in the UK

Constantin Zopounidis Michael Doumpos,Fotios Pasiouras
This study investigates the efficiency of two multicriteria decision aid methods, namely UTADIS and MHDIS in the development of business failure prediction models in the UK, as opposed to models developed with discriminant analysis and logistic regression. The dataset consists of 200 manufacturing UK firms out of which 100 failed during the period 2001-2003. The models are developed and validated using 10-fold cross validation. The results show that UTADIS and MHDIS achieve satisfactory classification accuracies, while both outperform logistic regression and discriminant analysis. Thus, the developed MCDA models could be of particular interest to creditors, investors, auditors and regulators in the UK
Keywords: Bankruptcy, Failure, Multicriteria decision aid, Prediction, UK. 
JEL codes: G33, C63

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Frontiers in Finance and Economics

FRONTIERS IN FINANCE AND ECONOMICS with ISSN no. 1814-2044 Multi-Disciplinary Journal of Economic, Finance and Business and Management Sciences. Frontiers of Finance and Economics, a bi-Annual UGC Approved Journal. Send papers for publication to editor@ffejournal.org

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