Corporate Bankruptcy Forecasting before and after the COVID-19 Pandemic in Poland

Objective: The main objective of the study is to analyse the impact of the economic crisis caused by the COVID-19 pandemic on the forecasting of corporate bankruptcy in Poland. The analysis verifies the accuracy of models used to make forecasts and examines the determinants of corporate bankruptcy before and after the pandemic. Research Design & Methods: The study used financial data from 121,000 companies for the 2015–2022 period. Five variable selection methods, eight classification methods and 1,000 different random learning and testing samples were used to perform the study. Findings: The results indicate different determinants of corporate bankruptcy before and after the outbreak of the COVID-19 pandemic. Models constructed and tested before the pandemic had lower classification accuracy than models constructed and tested after the outbreak. Implications / Recommendations: The results confirm the need to reconstruct and test models for forecasting corporate bankruptcy during periods of dynamic changes in capital markets, such as those triggered by the COVID-19 pandemic. Contribution: The considerations presented in the article deepen knowledge of the impact of the economic crisis on the forecasting of corporate bankruptcy in Poland. To date, no research has been conducted with such a wide range of research methodology used in the context of the crisis caused by the COVID-19 pandemic.