The role of corporate governance in forecasting bankruptcy: Pre- and post-SOX enactment

Chia Ying Chan, De Wai Chou*, Jane Raung Lin, Feng Ying Liu

*此作品的通信作者

    研究成果: 雜誌貢獻期刊論文同行評審

    11 引文 斯高帕斯(Scopus)

    摘要

    This paper contributes to the literature by documenting the improved performance of bankruptcy prediction models after including corporate governance variables. The empirical results demonstrate better predictive power for financial bankruptcy than previous bankruptcy prediction models, particularly in the post-SOX period. Our theoretical argument emphasizes the urgent need for such improvements to the bankruptcy prediction model following the introduction of the SOX Act, with the empirical results providing intuitive economic meaning for all relevant market participants. Policymakers may consider enacting laws to include designs for corporate governance monitoring mechanisms, entrepreneurs may use this model to improve their own governance structures and compensation mechanisms to avoid financial bankruptcy, and investors may refer to it to ensure that 'losers' are excluded from their investment portfolios.

    原文英語
    頁(從 - 到)166-188
    頁數23
    期刊North American Journal of Economics and Finance
    35
    DOIs
    出版狀態已發佈 - 2016 一月 1

    ASJC Scopus subject areas

    • 金融
    • 經濟學與計量經濟學

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