Using Data Envelopment Analysis and Logit model in Business Failure Prediction

• Main Authors: Ya-Chi Huang, 黃雅祺
• Other Authors: Jia-Jane Shuai
• Format: Others
• Language: zh-TW
• Published: 2006
• Online Access: http://ndltd.ncl.edu.tw/handle/33717732111592286489

碩士 === 明新科技大學 === 資訊管理研究所 === 94 === The local financial storm in Taiwan was triggered by the Asian financial storm in late 1998, which caused the financial crisis for many stock-listed companies. Some serious financial problems were exploded like undermined bombs. Although these problems were temporarily solved by a series of actions, they did not resolve the basic causes. The electronics industry has been one of the leading industries in Taiwan. Therefore, this research adopted the case study method to investigate the causes of the financial crisis for those companies. This paper proposes a hybrid approach that predicts the failure of firms based on the past business data, combining Logit model and worst practice data envelopment analysis (DEA). The worst practice DEA can identify worst performers (in quantitative financial data) by placing. Both DEA and Logit modes are commonly used in practice. Both have limitations. The hybrid model Logit DEA model takes the best of both models, by avoiding the pitfalls of each. For the experiment, the financial data of 306 Taiwan firms during the period 2001–2005 were selected. The results show that the hybrid approach is a promising alternative to the conventional methods for failure prediction.