Alaka, H A; Oyedele, L O; Owolabi, H A; Ajayi, S O; Bilal, M and Akinade, O O (2016) Methodological approach of construction business failure prediction studies: A review. Construction Management and Economics, 34(11), pp. 808-842. ISSN 01446193
Abstract
Performance of bankruptcy prediction models (BPM), which partly depends on the methodological approach used to develop it, has virtually stagnated over the years. The methodological positions of BPM studies were thus investigated. Systematic review was used to search and retrieve 70 journal articles and doctoral theses. Their “general methods” and “philosophical underpinnings” were investigated using summary of findings tables and meta-analysis. “General methods” results showed positive trends in terms of techniques being used, error cost consideration and model validation, with some use of skewed data being the main drawback. For “philosophical underpinnings”, positivism paradigm was discovered to be at the core of BPM studies. This is deemed inadequate because of the need to consider industries' dynamism, financial variables flaws and social factors which actually lead to the financial status of firms. The pragmatism paradigm using mixed method is proposed. A research design framework for executing the proposed methodology is presented. This will help BPM developers go through more rigorous and robust methodology to deliver better and more valid models. Limitations of study include not reviewing studies not reported in English language and impact of different countries' accounting practices on ratios. Limited availability of theses' database resulted in reviewing only four theses.
| Item Type: | Article |
|---|---|
| Uncontrolled Keywords: | bankruptcy prediction models; insolvency; methodology; research methods |
| Index terms: | meta-analysis, research design, insolvency, database, business failure, social factor, methodology, accounting, mixed method, validation, pragmatism, paradigm, bankruptcy, systematic literature review, prediction model, positivism, journal |
| Subjects: | professional development, data management, education and knowledge transfer, research design and methodology, sociology, data collection methods, research methods, prediction and forecasting, research dissemination and communication, research evaluation and metrics, liability law, philosophical concept, economic analysis |
| Topics: | Business Strategy, Information Management, Research Practice, Digital Applications, Legal Issues |
| Descriptive scope: | 5 PCTEA |
N.B. Descriptive scope is a count of how many of the five facets of empirical research are indicated by the words used in title, abstract and keywords. It is not intended as a judgement on the research; merely a count of the kind of word we would expect to indicate Phenomenon, Concepts, Theoretical framing, Empirical techniques, Analytical techniques. If all five are present, then a code of “5 PCTEA” will indicate this. If you feel the coding for this record is questionable, we welcome discussion around the terms we matched or the way we categorized them. The facet you would expect may not be coded, or a facet may be coded inappropriately. This can also bear on a larger question, of which facets should be treated as defining in construction management research. Please get in touch, and we will look at it. More details here