Labor Productivity as a Factor for Bankruptcy Prediction
Labor Productivity as a Factor for Bankruptcy Prediction

Summary/Abstract: The current study evaluates the potential of the labor productivity in predicting corporate bankruptcy. The population subjected to the analysis included all companies form Timis County with yearly sales of over 2200 Euros. The interest for the labor productivity was based on the recommendations of the scientific literature, as well as on the availability of information concerning its values to all stakeholders. The event on which the research was focused was represented by the manifestation of bankruptcy 2 years after the date of the financial statements of reference. All tests were performed over a paired sample of 1424 companies. The methodology employed in evaluating the potential of the labor productivity was based on the general accuracy ensured by the ratio (63.2%) and the Area Under the ROC Curve (0.665). The results confirm the practical utility of the labor productivity in the prediction of bankruptcy.

• Details
• Contents