This dissertation investigates the relationships between probability of default and firm-level covariates. Two hypotheses are tested by comparing different specifications. I find abundant evidence suggesting that some univariate relationships between firm-level covariates and probability of default and some ceteris paribus relationship between firm-level covariates and probability of default are not linear. The empirical results presented in this paper suggest also that, when a large sample is used, additive models outperform standard linear models. Finally, I also provide an explanation for any non-linearity that is presented.
|Educations||MSc in Accounting, Strategy and Control, (Graduate Programme) Final Thesis|
|Number of pages||80|