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A Scoring Model For Portuguese Non-Financial Enterprises
This article presents an econometric model for identifying credit failure based on individual characteristics of Portuguese enterprises. The coefficients associated with the financial ratios proved to be significant and are consistent with economic intuition. The estimated model reveals a high level of sectoral heterogeneity with regard to firms’ credit quality. From 2011 to 2012, there was, on average, an increase in the probability of default of firms with credit records, most notably the negative evolution of large enterprises and enterprises in the construction, real estate, restaurant & hotels and mining & quarrying sectors. As a result, in the recent period, there has been a general deterioration in the loan portfolio quality of the Portuguese banking system, which is heavily concentrated in higher risk firms.