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- W3016404005 abstract "Corporate governance is an important determinant of corporate performance. Poor corporate governance can damage the interests of shareholders, and may lead to business collapse. This paper expands the literature on credit risk management by assessing the effectiveness of aspects of corporate governance for predicting financial distress in a dynamic discrete-time survival analysis model. It is a comprehensive, up-to-date and thorough study, which uses a large range of corporate governance measures, financial ratios and macroeconomic variables in a panel data structure over a 17-year period. Furthermore, the paper addresses the relationship between government ownership and the risk of financial distress in China. The results suggest that although corporate governance alone is not sufficient to accurately predict financial distress, it can add to the predictive power of financial ratios and macroeconomic factors. In addition, the model provides insights into the role of state ownership, independent directors, institutional investors and some personal characteristics of the Chair of the board. Implications are made regarding them and the debt and bankruptcy problem in China and Asia. • A wide range of corporate governance measures are used to predict the risk of financial distress. • Board composition, ownership structure, personal compensation and characteristics are related to financial distress risk. • Survival analysis on a panel dataset is employed for both in-sample prediction and out-of-sample validation. • Best discriminant power is achieved when financial and non-financial information is combined." @default.
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- W3016404005 date "2021-09-01" @default.
- W3016404005 modified "2023-10-04" @default.
- W3016404005 title "Predicting the risk of financial distress using corporate governance measures" @default.
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- W3016404005 doi "https://doi.org/10.1016/j.pacfin.2020.101334" @default.
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