Potential and Limitations of D.E.A. as a Bankruptcy Prediction Tool in the Light of a Study on Italian Listed Companies

This paper presents the results of an empirical study carried out on a sample of Italian firms listed on the Stock Exchange and sets out to evaluate the effectiveness of Data Envelopment Analysis (D.E.A.) as a tool for bankruptcy prediction in the short term, as compared to Discriminant Analysis and Logit Regression. In particular, the research verifies whether, in line with studies already carried out on samples of firms in other countries, D.E.A. is found to have a greater capacity for bankruptcy prediction, while Logit Regression and Discriminant Analysis perform better in non-bankruptcy and overall prediction in the short term.