Logit models for analysing and forecasting the performance of industrial enterprises in the Treviso area

Abstract

Purpose

The objective of this study is to formulate a model for forecasting the performance of firms in terms of trends in turnover, investments, exports, employment and flexibility, and to identify the principal correlations with selected dependent variables, such as the level of computerization, the extent of collaboration with competitors and the characteristics of the product.

Design/methodology/approach

This paper analyses data, which refers to a survey conducted on a sample of 89 firms from the Treviso province in the north east of Italy by using the Logit model.

Findings

From the application of the logit models it emerges that the most important variables contributing to the economic success of the firms are technological flexibility, collaboration, with competitors, and investments in certain areas such as research and development, marketing and fixed technology. Moreover, the findings show that the factors which contribute most significantly to technological flexibility (a key factor for the growth of the firm) are flexibility to demand, the level of computerization and staff training.

Practical implications

From the application of logit models it emerges that the most important variables influencing the good performance of firms are flexibility in keeping pace with technology, collaboration with competitors, and the choice of certain types of investment. Moreover, the variables which contribute most to greater flexibility are investments in human capital and in information technology, as well website use, the technological characteristics of the product and the firm's flexibility in following the demand trend.

Originality/value

In this study logit models are analysed from both a theoretical and applied point of view.

Citation

Nicolis, O. and Tondini, G. (2006), "Logit models for analysing and forecasting the performance of industrial enterprises in the Treviso area", Managerial Finance, Vol. 32 No. 8, pp. 654-672. https://doi.org/10.1108/03074350610676750