Tomasz Korol

Faculty of Management and Economics,

Gdańsk University of Technology,

Poland

tomasz.korol@zie.pg.gda.pl 

ORCID 0000-0002-7623-3404

Forecasting 15-year development differences for bankrupt and non-bankrupt enterprises in Asia, Latin America and Europe

Abstract. The study proposes dynamic models to address the increased importance of the corporate bankruptcy phenomenon and the growing need for reliable forecasting models for three economic regions: Central Europe, Far-East Asia and Latin America. The paper presents a solution for effective bankruptcy risk forecasting by implementing both highly effective and usable trajectories that take into account the dynamic long-term economic indicators of enterprises. The objective of the research is to develop separate models that forecast the long-term differences in the economic performance between bankrupt and non-bankrupt enterprises in Latin America, Far-East Asia and Europe. A financial engineering approach was implemented to achieve this goal. Nine forecasting models were developed with the use of three methods: a multivariate discriminant analysis, the logit model, and fuzzy sets. With the use of the estimated models, 15-year dynamic trajectories were determined for each group of enterprises. The estimated models and dynamic systems in the form of trajectories can be used by analysts to identify the symptoms of a company going bankrupt long before the traditional, static bankruptcy forecasting models reveal such risk, thus they can be implemented in decision-making processes in economic systems.

Received: September, 2024

1st Revision: May, 2025

Accepted: August, 2025

DOI: 10.14254/2071-8330.2025/18-3/1

JEL Classification: G33, F37

Keywords: development differences, financial crisis, forecasting, fuzzy sets, bankruptcy models, decision making