Developing an early prediction model of bankruptcy in the UAE construction industry

The aim of this research is to develop an early prediction model of bankruptcy providing the UAE construction companies with practices to avoid the threat of insolvency and its related consequences on individuals and the economy. The methodology used to achieve the aim of the research is by collecting data from literature review contributing to develop a survey and semi-structured interview questions. The focus of the research methodology is to identify the reasons for bankruptcy, understand organizational strategies during financial crises and pandemics, rating the challenges facing the developed model, and evaluating the developed model of bankruptcy. The outcome from the survey and interviews is that the main reasons for organisations bankruptcy are due to cash flow management, payment delays, and false cost reporting which is justifying the data in the literature review. Moreover, there is no prime reason for bankruptcy as much as it is a series of poor decisions. Another finding is that the level of knowledge and awareness about bankruptcy has increased especially during the current pandemic contemporary with the evaluation of the developed prediction model that is designed specifically for the UAE construction industry. The evaluation of the developed model by participants is good for being accurate, suitable, efficient, and realistic. This research provides a framework for the companies to predict the future risk of insolvency. Moreover, assisting the research to investigate and improve the developed model which is lacking transparency and published data on selecting the most important criteria and variables for the model.