We investigate non-financial variables for predicting bankruptcy in small and medium-sized enterprises (SMEs). The variables encompass management, board and ownership structures and are sourced from universally accessible information, rendering them available to all stakeholders and allowing for...

We investigate non-financial variables for predicting bankruptcy in small and medium-sized enterprises (SMEs). The variables encompass management, board and ownership structures and are sourced from universally accessible information, rendering them available to all stakeholders and allowing for...

Machine learning (ML) methods are shown to provide better predictions than simpler linear methods. Still, academics and practitioners in finance tend to use linear methods as they are considered easier to interpret. I show how to make ML methods equally interpretable by using an explainable...

We employ two frameworks for finding the best variables for explaining default of mortgages in an emerging market. Firstly, we use SHapley Additive exPlanations (SHAP) values with five different tree-based machine learning methods. Secondly, we apply the least absolute shrinkage and selection...

The purpose of our paper is to investigate whether any differences between International Financial Reporting Standards (IFRS) and local Generally Accepted Accounting Principles (GAAP) impact the transparency of financial reporting of non-listed companies through bankruptcy prediction. This...

The purpose of our paper is to investigate whether any differences between International Financial Reporting Standards (IFRS) and local Generally Accepted Accounting Principles (GAAP) impact the transparency of financial reporting of non-listed companies through bankruptcy prediction. This...

In this paper, we test alternative feature selection methods for bankruptcy prediction and illustrate their superiority versus popular models used in the literature. We test these methods using a comprehensive dataset of more than one million financial statements from privately held Norwegian...