Abstract
Various methodological tools have been employed to assess the viability of firms. In the current study, the methodological approach is based on fuzzy sets and Boolean logic, namely, the fuzzy set Qualitative Comparative Analysis method (fsQCA), which explores all the necessary conditions and sufficient combinations in a dataset for the presence or the absence of an outcome. Necessary causal conditions are those that produce the outcome, while sufficient combinations are those that always lead to the given outcome. The fsQCA method focuses on linguistic summarization of ‘if-then’ type rules. In this frame, the method explores rules, which lead to an outcome condition. The outcome explored in the current study concerns the viability of 89 randomly selected Greek firms for three consecutive years, 2009—2011. According to their financial situation, firms are either viable or in bankruptcy or even in a between financial condition. Our analysis is based on five financial ratios: the Total Debt Capacity, the Long-Term Debt Capacity, the Financial Expenses Management, the Current Ratio (CR), and the Quick Ratio (QR). The results indicate that necessary conditions for viable firms are CR and QR for each year. Moreover, one sufficient rule is extracted, the same for each year, which includes the necessary conditions CR and QR along with LTDC.
Similar content being viewed by others
Notes
“Don’t care” means causal combinations that are either impossible (i.e., there are no cases to support them) or for which there are fewer cases than the frequency threshold. In the example of Sect. 2, these “don’t care” combinations with 1 or 0 instances (below the frequency threshold = 2) are 25.
References
Altman EI (1983) Corporate financial distress. Wiley Interscience, New York
Ammar S, Wright R, Selden S (2000) Ranking state financial management: A multilevel fuzzy rule based system. Decision Sciences 31:449–481
Ammar S, Duncombe W, Wright R (2001) Evaluating capital management, a new approach. Public Budgeting and Finance 21:47–69
Barnes P (1987) The analysis and use of financial ratios: A review article. Journaal of Bussiness Finance and Accounting 14:446–461
Bellovary JL, Giacomino DE, Akers MD (2007) A review of bankruptcy prediction studies: 1930 to present. Journal of Financial Education 1:3–41
Bezdek JC (1993) Fuzzy models — What are they, and why? IEEE Transactions on Fuzzy Systems 1:1–5
Böhm E, Eggert A, Thiesbrummel Ch (2017) Service transition: A viable option for manufacturing companies with deteriorating financial performance? Industrial Marketing Management 60:101–111
Dang C, Li Z, Yang C (2018) Measuring firm size in empirical corporate finance. Journal of Banking and Financee 86:159–176
Elliott, T. (2013). Fuzzy set qualitative comparative analysis: An introduction. Research notes, Statistics Group: UCl.
Fiss PC (2007) A set-theoretic approach to organizational configurations. Academy of Management Review 32:1180–1198
Fiss PC (2011) Building better causal theories: A fuzzy set approach to typologies in organization research. Academy of Management Journal 54:393–420
Florea A-M, Bercu F, Radu RI, Stanciu S (2019) A fuzzy set qualitative comparative analysis (fsQCA) of the agricultural cooperatives from south east region of Romania. Sustainability 11:5927
Garefalakis A, Sariannidis N, Lemonakis C (2018) Operational elements of narrative disclosure information (NDI) in a geographical context. Annual Operation Resources. https://doi.org/10.1007/s10479-018-3075-9
Kent R (2008) Using fsQCA. A brief guide and workshop for fuzzy-set Qualitative Comparative Analysis, university notes, Department of Marketing, University of Stirling
Kosko B (1986) Fuzzy entropy and conditioning. Inf Sci 40(2):165–174
Lemonakis C, Garefalakis A, Giannarakis G, Tabouratzi E, Zopounidis C (2017) Innovation and SMEs financial distress during the crisis period: The Greek paradigm. In: Floros C, Chatziantoniou I (eds) The Greek debt crisis. Palgrave Macmillan, Cham
Lev B, Sunder S (1979) Methodological issues in the use of financial ratios. Journal of Accounting and Economics 1:187–210
Mahoney J, Goertz G (2006) A tale of two cultures: Contrasting quantitative and qualitative research. Political Analysis 14:227–249
Mendel JM, Korjani MM (2012a) Charles Ragin’s fuzzy set qualitative comparative analysis (fsQCA) used for linguistic summarizations. Information Sciences 202:1–23
Mendel J.M., Korjani M.M. (2012b). Fast Fuzzy Set Qualitative Comparative Analysis (Fast fsQCA), Conference Paper in Studies in Fuzziness and Soft Computing, IEEE, DOI: https://doi.org/10.1109/NAFIPS.2012.6291025, August 2012
McCluskey EJ (1966) Introduction to the theory of switching circuits. McGraw-Hill, New York
Pajunen K (2008) Institutions and inflows of foreign direct investment: a fuzzy-set analysis. Journal of International Business Studies 39(4):652–669
Quine WV (1952) The problem of simplifying truth functions. American Mathematical Monthly 59:521–531
Ragin CC (1987) The comparative method. Moving beyond qualitative and quantitative strategies. University of California Press, California
Ragin CC (1999) Using qualitative comparative analysis to study causal complexity. Health Services Research 34(5):1225–1239
Ragin CC (2000) Fuzzy-set social science. University of Chicago Press, Chicago, IL, p 2000
Ragin CC (2008) Redesigning social inquiry: Fuzzy sets and beyond. Chicago University Press, Chicago
Simón-Moya V, Revuelto-Taboada L (2015) Revising the predictive capability of business plan quality for new firm survival using qualitative comparative analysis. Journal of Bussiness Research 69:1351–1356
Schneider C, Wagemann C (2010) Qualitative comparative analysis (QCA) and fuzzy-sets: Agenda for a research approach and a data analysis technique. Comparative Sociology 9(3):376–396
Tippett M, Whittington G (1995) An empirical evaluation of an induced theory of financial ratios. Accounting and Business Research 25:208–222
Voulgaris, F. Floros C. and Lemonakis, C. (2014), Modeling a Competitive Index for Greek SMEs: A qualitative approach, presented in the 5th National Conference of the Financial Engineering and Banking, on 19th of December 2014, Athens, Greece
Wang LX, Mendel JM (1992) Generating fuzzy rules by learning from examples. IEEE Trans Syst Man, Cyber 22(2):1414–1427
Woodside A (2011) Responding to the severe limitations of cross-sectional surveys: Commenting on Rong and Wilkinson’s perspectives. Australas Mark J 19:153–156
Woodside A (2013) Moving beyond multiple regression analysis to algorithms: Calling for adoption of a paradigm shift from symmetric to asymmetric thinking in data analysis and crafting theory. Journal of Bussiness Research 66(4):463–472
Zadeh LA (1973) Outline of a new approach to the analysis of complex systems and decision processes. IEEE Transactions on Systems, Man, and Cybernetics, SMC-3 25:28–44
Zadeh LA (1996) Fuzzy logic = computing with words. IEEE Transactions on Fuzzy Systems 4:103–111
Zopounidis C (1987) A multicriteria decision-making methodology for the evaluation of the risk of failure and an application. Found Control Engrg 12:45–67
Zopounidis C, Matsatsinis NF, Doumpos M (1996) Developing a multicriteria knowledge-based decision support system for the assessment of corporate performance and viability: The FINEVA system. Fuzzy Economic Review 1(2):35–53
Author information
Authors and Affiliations
Corresponding author
Additional information
Publisher's Note
Springer Nature remains neutral with regard to jurisdictional claims in published maps and institutional affiliations.
Rights and permissions
About this article
Cite this article
Krassadaki, E., Zopounidis, C. & Lemonakis, C. Α fuzzy-set Qualitative Comparative Analysis Approach for the evaluation of corporate viability. Oper Res Int J 22, 3549–3570 (2022). https://doi.org/10.1007/s12351-021-00653-2
Received:
Revised:
Accepted:
Published:
Issue Date:
DOI: https://doi.org/10.1007/s12351-021-00653-2