Empirical Study on Bond Default Early Warning Model Based on Logistic Modeling

Zheng Yu

doi:10.54097/hbem.v20i.12366

Authors

Zheng Yu

DOI:

https://doi.org/10.54097/hbem.v20i.12366

Keywords:

Logistic models; bond default; early warning models.

Abstract

The objective of this paper is to develop a precise bond default early warning model for China's capital market by screening indicator variables and constructing a Logistic model based on existing literature on corporate default, bankruptcy, or financial distress. This paper uses financial data of all the bond-issuing enterprises that meet the research criteria during the period from 2014 to June 2019 as a training sample to construct the model. It examines financial indicators from one to three years before bond defaults occur and uses them to create an early warning model. Additionally, it uses financial data of all eligible bond-issuing enterprises from July 2019 to December 2019 as a test sample to evaluate the predictive accuracy of the developed model.

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