RE-ESTIMATIONS OF THE ZMIJEWSKI AND OHLSON BANKRUPTCY PREDICTION MODELS

John Stephen Grice, Michael Timothy Dugan

Research output: Chapter in Book/Report/Conference proceedingChapter

22 Scopus citations

Abstract

Current accounting research uses the Zmijewski (1984) and Ohlson (1980) bankruptcy prediction models as proxies for financial distress/bankruptcy. Such use assumes that the models' predictive powers transcend to time periods, industries, and financial conditions outside of those used to originally develop the models. The objective of this paper is to address whether the construct validity of the financial distress/bankruptcy proxies (based on the original models) used in those recent studies is possibly open to question. The evidence provided in this study suggests that researchers who use the Zmijewski and Ohlson models using recent data should re-estimate the models' coefficients to improve the predictive accuracy of the models.

Original languageEnglish (US)
Title of host publicationAdvances in Accounting
Pages77-93
Number of pages17
DOIs
Publication statusPublished - Dec 1 2003
Externally publishedYes

Publication series

NameAdvances in Accounting
Volume20
ISSN (Print)0882-6110

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ASJC Scopus subject areas

  • Accounting

Cite this

Grice, J. S., & Dugan, M. T. (2003). RE-ESTIMATIONS OF THE ZMIJEWSKI AND OHLSON BANKRUPTCY PREDICTION MODELS. In Advances in Accounting (pp. 77-93). (Advances in Accounting; Vol. 20). https://doi.org/10.1016/S0882-6110(03)20004-3