Beyond The Numbers: Machine Learning Forecasting of Cash Flows in Emerging Markets

  • Authors

    • Mahmoud Jamal Shawakha Arab American University Palestine Ramallah – Palestine
    https://doi.org/10.14419/bcj6vk15

    Received date: April 26, 2025

    Accepted date: May 24, 2025

    Published date: June 25, 2025

  • Cash flow prediction, Palestine Exchange, Generalized Method of Moments (GMM), JMP Boosted Tree, emerging markets

  • Abstract

    This study examines the ability of past operating cash flows and earnings to predict future cash flows in the context of the Palestinian economy. Prior research offers mixed evidence on which measure—cash flows or earnings—has greater predictive value. Using a panel of twelve industrial firms listed on the Palestine Exchange (PEX) from 2014 to 2021, this study moves beyond conventional linear models by applying a non-linear machine learning method, specifically the Boosted Tree model in JMP. The results show that while the Generalized Method of Moments (GMM) provided statistically insignificant outcomes, the Boosted Tree model exhibited strong predictive power. This indicates that both past earnings and cash flows can be effective predictors when used within a flexible, adaptive modeling framework. These findings highlight the importance of methodological innovation, especially in emerging markets like Palestine, where financial limitations, weak institutional structures, and political instability are prevalent. By introducing Boosted Tree modeling, this study contributes a valuable forecasting approach for data-constrained and complex environments. The results offer practical implications for investors, analysts, and corporate decision-makers aiming to improve cash flow forecasting in volatile and structurally fragile economies.

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  • How to Cite

    Shawakha, M. J. . (2025). Beyond The Numbers: Machine Learning Forecasting of Cash Flows in Emerging Markets. International Journal of Accounting and Economics Studies, 12(2), 252-260. https://doi.org/10.14419/bcj6vk15