Get 20M+ Full-Text Papers For Less Than $1.50/day. Start a 14-Day Trial for You or Your Team.

Learn More →

The Timescale Effects of Corporate Governance Measure on Predicting Financial Distress

The Timescale Effects of Corporate Governance Measure on Predicting Financial Distress This study aims to investigate the timescale effects of the corporate governance measure on predicting financial distress of corporations. A new corporate governance measure is adopted in the logistic regression model. Historical data of the companies listed on the Taiwan Stock Exchange Corporation (TSEC) were used in the empirical analysis. The analysis was based on three different prediction horizons comprising one-, two- and three-year horizons. The results confirmed that the accuracy of the logistic regression model for predicting corporate financial distress can be improved by incorporating the corporate governance measure. Moreover, the improvements of the correct rate for classification by incorporating the corporate governance measure increased as the prediction horizon was raised. The improvements of the correct rate for classification by incorporating the corporate governance measure are 2.9%, 4.4% and 5.8% for "Year 1", "Year 2" and "Year 3" models respectively. http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png Review of Pacific Basin Financial Markets and Policies World Scientific Publishing Company

The Timescale Effects of Corporate Governance Measure on Predicting Financial Distress

Loading next page...
 
/lp/world-scientific-publishing-company/the-timescale-effects-of-corporate-governance-measure-on-predicting-jivEWgfAkf

References (16)

Publisher
World Scientific Publishing Company
Copyright
Copyright ©
ISSN
0219-0915
eISSN
1793-6705
DOI
10.1142/S0219091508001246
Publisher site
See Article on Publisher Site

Abstract

This study aims to investigate the timescale effects of the corporate governance measure on predicting financial distress of corporations. A new corporate governance measure is adopted in the logistic regression model. Historical data of the companies listed on the Taiwan Stock Exchange Corporation (TSEC) were used in the empirical analysis. The analysis was based on three different prediction horizons comprising one-, two- and three-year horizons. The results confirmed that the accuracy of the logistic regression model for predicting corporate financial distress can be improved by incorporating the corporate governance measure. Moreover, the improvements of the correct rate for classification by incorporating the corporate governance measure increased as the prediction horizon was raised. The improvements of the correct rate for classification by incorporating the corporate governance measure are 2.9%, 4.4% and 5.8% for "Year 1", "Year 2" and "Year 3" models respectively.

Journal

Review of Pacific Basin Financial Markets and PoliciesWorld Scientific Publishing Company

Published: Mar 1, 2008

Keywords: Corporate governance financial distress financial ratios logistic regression

There are no references for this article.