10 • 1

CHAPTER

10

BUSINESS FAILURE CLASSIFICATION

MODELS: AN INTERNATIONAL

SURVEY

Edward I. Altman

New York University

Paul Narayanan

Consultant

CONTENTS

10.1 Introduction 2
(a) Developing and Developed
Country Models 3
(b) Emerging Markets
Application 4
(c) Altman, Hartzell, and Peck
(1995) 4
10.2 Japan 6
(a) Takahashi, Kurokawa, and
Watase (1984) 6
(b) Ko (1982) 7
10.3 Switzerland 8
(a) Weibel (1973) 8
10.4 Germany 8
(a) Beerman (1976) 8
(b) Weinrich (1978) 8
(c) Gebhardt (1980) 9
(d) Fischer (1981) 9
(e) von Stein and Ziegler (1984) 10
(f) Baetge, Huss, and Niehaus
(1988) 12
10.5 England 13
(a) Taffler and Tisshaw (1977) 13
(b) Research Design 13
(c) Empirical Results 13
(d) Implications 14
(e) Other U.K. Studies 15
10.6 Canada 15
(a) Knight (1979) 15
(b) Altman and Lavallee (1981) 16

(c) Classification Results 16

(d) Implications 17

10.7 The Netherlands 17

(a) Bilderbeek (1977) 17

(b) Van Frederikslust (1978) 18

(c) The Fire Scoring System: de

Breed and Partners (1996) 19

10.8 France 19

(a) Altman, Margaine,

Schlosser, and Vernimmen

(1974); Mader (1975, 1979,

1981); Collongues (1977);

and Bontemps (1981) 19

10.9 Spain 20

(a) Fernández (1988) 20

(b) Briones, Marín, and Cueto

(1988) 22

10.10 Italy 23

(a) Altman, Marco, and Varetto

(1994) 23

(b) Neural Networks 24

(c) Results 25

(d) Cifarelli, Corielli, and

Forestieri (1988) 26

10.11 Australia 26

(a) Castagna and Matolcsy

(1982) 26

(b) Research Design 26

(c) Empirical Results 26

(d) Izan (1984) 27