RETHINKING FINANCIAL DISTRESS DETERMINANTS: INSIGHTS FROM THE AGRO-INDUSTRIAL SECTOR

Miroslav Čavlin; Jelena Vapa-Tankosić; Veljko Dmitrović; Stella Suljić Nikolaj; Dejan Mikerević

doi:10.59267/ekoPolj2602499C

Authors

Miroslav Čavlin University Business Academy, Faculty of Economics and Engineering Management in Novi Sad, Cvećarska 2, 21000 Novi Sad, Serbia https://orcid.org/0000-0001-7465-7441
Jelena Vapa-Tankosić University Business Academy, Faculty of Economics and Engineering Management in Novi Sad, Cvećarska 2, 21000 Novi Sad, Serbia https://orcid.org/0000-0001-8062-1154
Veljko Dmitrović University of Belgrade, Faculty of Organizational Sciences, Jove Ilića 154, 11000 Belgrade, Serbia https://orcid.org/0000-0001-8924-9758
Stella Suljić Nikolaj University of Rijeka, Faculty of Economics and Business, Ivana Filipovića 4, 51000 Rijeka, Croatia https://orcid.org/0000-0002-0435-4047
Dejan Mikerević University of Banja Luka, Faculty of Economics in Banja Luka, Bosnia and Herzegovina https://orcid.org/0009-0005-1757-2923

DOI:

https://doi.org/10.59267/ekoPolj2602499C

Keywords:

financial distress, capital structure, bankruptcy prediction, logistic regression, firm size, agro-industry

Abstract

This paper examines the determinants of financialdistress in the agro-industrial sector of the Republicof Serbia. The empirical analysis is based on paneldata for 20 large companies from the food productionsector in the period 2019–2024. Financial distress wasoperationalized using the revised Altman Z′ indicator,with an extended classification threshold (Z′ < 1.8). Binarylogistic regression was applied to assess the impact ofselected variables. The findings have shown that thecapital structure is the dominant determinant of financialdistress, while indicators of profitability and operatingcash flows do not show a statistically significant influence.At the same time, company size stood out as a significantfactor, with larger companies more likely to face financialdifficulties. The findings indicate that financial distressis not primarily conditioned by operational performance,but primarily by the structural characteristics of financingindicating the need for the development of integrative andmultidimensional analytical approaches in this area.

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