Journal article
Can corporate governance save distressed firms from bankruptcy? An empirical analysis
Review of quantitative finance and accounting, v 30(2), pp 225-251
Feb 2008
Abstract
We examine financially distressed firms and document how governance characteristics affect (1) a firm’s ability to avoid bankruptcy and (2) the power of financial/accounting information to predict bankruptcy. Overall, our findings indicate that a distressed firm’s governance characteristics significantly affect its probability of bankruptcy. We find that smaller and more independent boards with a higher ratio of non-inside directors and with larger ownership stakes of inside directors are more effective at avoiding bankruptcy once distress is indicated. These results are consistent with the belief that these types of governance structures induce more effective monitoring. The results are also consistent with the view that the inclusion of governance characteristics enhances the power of financial accounting models in predicting bankruptcy.
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Details
- Title
- Can corporate governance save distressed firms from bankruptcy? An empirical analysis
- Creators
- Eliezer Fich - LeBow College of Business Drexel University 101 North 33rd Street - Suite 214A Philadelphia PA 19104 USASteve Slezak - College of Business University of Cincinnati Carl H. Lindner Hall PO Box 210195 Cincinnati OH 45221-0195 USA
- Publication Details
- Review of quantitative finance and accounting, v 30(2), pp 225-251
- Publisher
- Springer US; Boston
- Resource Type
- Journal article
- Language
- English
- Academic Unit
- Finance
- Web of Science ID
- WOS:000210615900005
- Scopus ID
- 2-s2.0-38149070196
- Other Identifier
- 991014878336004721
InCites Highlights
Data related to this publication, from InCites Benchmarking & Analytics tool:
- Collaboration types
- Domestic collaboration
- Web of Science research areas
- Business, Finance