The Comparison of the Economic Value in Hazard Models with Accounting Approach for Bankruptcy Prediction

The purpose of comparing the bankruptcy prediction models is introducing the best model to avoid wasting investment and rare resources. So it is crucial to choose a model that has more economic values, investigations and comparisons often have been made between bankruptcy prediction models that have considered the accuracy dimension. In recent years, other dimensions have been paid attention to as well.These dimensions are the explanatory power and models of economic value. As the economic dimension has not been investigated in Iran, for the first time comparing the accounting approach with hazard models in economic value dimension are discussed in this study. For this purpose, the hazard model of (Shumway, 2001;Campbell et al., 2008), and accounting based model of Pourheydari and Koopayee(2010) is considered. The Loan Pricing Stein (2005) and Blochlinger and C. Lippold(2006) also two proposed measures by Basel (ӀӀӀ) including return on assets andreturn on risk- weighted assets have been used to assess the economic value . Thesample of research is consisted of 242 admitted companies on Tehran StockExchange from 2004 to 2015. The results show that the hazard models have moreeconomic value than accounting model and the model of Campbell et al (2008) isthe most economical mode