The impact of industry and business entity type on corporate survival

Abstract

The probability of corporate bankruptcy is typically analysed on the basis of credit score models, which are statistically derived models for the prediction of credit risk.If the dependent variable is time to bankruptcy, we can use the methods of survival analysis. The main objective of this article is to apply survival analysis on the data of Czech companies and assess the impact of industry and type of business entity on corporate survival. According to the main findings, there is an association between all these factors and the probability of bankruptcy based on the used data sample. The main contribution to the current research is the application on real data of Czech companies, the study of selected factors on the probability of corporate survival and the comparison of estimated bankruptcy rates.