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A Comprehensive Review of Corporate Bankruptcy Prediction in Hungary

Department of Enterprises Finances, Corvinus University of Budapest, Fővám tér 8, 1093 Budapest, Hungary
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J. Risk Financial Manag. 2020, 13(2), 35; https://doi.org/10.3390/jrfm13020035
Received: 12 January 2020 / Revised: 16 February 2020 / Accepted: 17 February 2020 / Published: 19 February 2020
The article provides a comprehensive review regarding the theoretical approaches, methodologies and empirical researches of corporate bankruptcy prediction, laying emphasis on the 30-year development history of Hungarian empirical results. In ex-socialist countries corporate bankruptcy prediction became possible more than 20 years later compared to the western countries, however, based on the historical development of corporate bankruptcy prediction after the political system change it can be argued that it has already caught up to the level of international best practice. Throughout the development history of Hungarian bankruptcy prediction, it can be tracked how the initial, small, cross-sectional sample and classic methodology-based bankruptcy prediction has evolved to today’s corporate rating systems meeting the requirements of the dynamic, through-the-cycle economic capital calculation models. Contemporary methodological development is characterized by the domination of artificial intelligence, data mining, machine learning, and hybrid modelling. On the basis of empirical results, the article draws several normative proposals how to assemble a bankruptcy prediction database and select the right classification method(s) to accomplish efficient corporate bankruptcy prediction. View Full-Text
Keywords: bankruptcy prediction; classification; credit risk modelling; corporate failure; rating systems bankruptcy prediction; classification; credit risk modelling; corporate failure; rating systems
MDPI and ACS Style

Kristóf, T.; Virág, M. A Comprehensive Review of Corporate Bankruptcy Prediction in Hungary. J. Risk Financial Manag. 2020, 13, 35.

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