Comparing predicative power of foreign adjusted bankruptcy through providing proposed model of bankruptcy in Iran

Document Type : Research Paper


1 Department of Accounting, Zahedan Branch, Islamic Azad University, Zahedan, Iran

2 Department of Accounting, University of Sistan and Baluchestan, Zahedan, Iran


The aim of the present study was to compare the productive power of foreign adjusted bankruptcy by providing a proposed model of bankruptcy in Iran. This research is applied in terms of purpose and descriptive and correlational in terms of nature which through that bankruptcy models are studied according to the Shumway's hazard model (2001), and in the form of a logit model and accounting are evaluated based on Pourheydari's and Koopayee's model (2010). Accordingly, a sample including1287 years, the company from 2006 to 2018 has been selected from Tehran Stock Exchange. For statistical hypothesis testing, receiver operating characteristics (ROC) was applied. Receiver operating characteristics is applicable in software like SAS, SPSS, and STATA. The results showed that Shumway's model (2001) provides a more accurate bankruptcy prediction of companies and this is the sign of superiority of the hazard model over classic models.


[1] A. Bazrafshan, and Z. Arefmanesh, Earnings behavior in bankrupt firms: the role of auditor, J. Asset Manag. Fin. 2(4) (2015) 1–14.
[2] J.L. Bellovary, D.E. Giacomino, and M.D. Akers, A review of bankruptcy prediction studies: 1930 to present, J. Fin. Edu. 33 (2007) 1–42.
[3] J. Boettcher, G. Cavanagh and M. Xu, Ethical issues that arise in bankruptcy, Bus. Soc. Rev. 119(4) (2014) 473–496.
[4] J.W. Do Prado, V. de Castro Alcˆantara, F. de Melo Carvalho, K.C. Vieira, L.K.C. Machado and D.F. Tonelli, Multivariate analysis of credit risk and bankruptcy research data: a bibliometric study involving different knowledge fields (1968–2014), Scientom. 106(3) (2016) 1007–1029.
[5] M.H. Ebrahimi Sarveolia, M.J. Babajani, M. Akhond and E. Fakher, A Pattern for Dynamic Prediction of Financial Distress by Using Survival Analysis, J. Quant. Econ. 15(4) (2019) 167–198.
[6] S. Estrin, J. Hanousek, E. Koˇcenda, and J. Svejnar, The effects of privatization and ownership in transition economies, J. Econ. Lit. 47(3) (2009) 699–728.
[7] M. Ghatebi, V. Khodadadi, A. Jerjerzadeh and A. Kaabamir, Bankruptcy prediction modeling using earning management variables, J. Econ. Model. 14(50) (2020) 131–152.
[8] Zh. Jia, Y. Shi, Ch. Yan and M. Duygun, Bankruptcy prediction with financial systemic risk, Euro. J. Fin. 26(7-8)(2019) 666–690.
[9] E. Kirkos, Assessing methodologies for intelligent bankruptcy prediction, Artif. Intell. Rev. 43(1) (2015) 83–123.
[10] G. Kordestani, R. Tatli and H. Kosari Far, The evaluate ability of Altman adjusted model to prediction stages of financial distress newton and bankruptcy, J. Invest. Knowledge 3(9) (2014) 83–99.
[11] L. Li and R. Faff, Predicting Corporate Bankruptcy: What Matters?, International Review of Economics and Finance, 62 (2019) 1–19.
[12] J. Marouˇsek, S. Haˇskov´a, R. Zeman and R. Van´ıˇckov´a, Managerial preferences in relation to financial indicators regarding the mitigation of global change, Sci. Engin. Eth. 21(1) (2015) 203–207.
[13] R. Mohseni, R. Agha Babaee and V. Mohammad Ghorbani, Financial distress prediction with use of the efficiency as a predictor variable, J. Econ. Res. Polic. 21(65) (2013) 123–146.
[14] D. Ogachi, R. Ndege, P. Gaturu and Z. Zoltan, Corporate bankruptcy prediction model, a special focus on listed companies in Kenya, J. Risk Fin. Manag. 13(3) (2020) 1–14.
[15] Y. Ogane, Banking relationship numbers and new business bankruptcies, Small Bus. Econ. 46(2) (2016) 169–185.
[16] H. Panahi, A. Asadzadeh, and A. Jalilimarand, A five-year-ahead bankruptcy prediction: The case of Tehran Stock Exchange, Fin. Res. J. 16(1) (2014) 57–76.
[17] M. Vaziri, The bankruptcy predictions of accepted companies in Tehran stock exchange using random forest algorithm (emphasizing financial reporting), J. New Res. Appr. Manag. Account. 4(33) (2020) 66–75.
Volume 13, Issue 1
March 2022
Pages 757-764
  • Receive Date: 02 June 2021
  • Revise Date: 18 July 2021
  • Accept Date: 30 July 2021