CORPORATE FAILURE PREDICTION MODELS FOR ADVANCED RESEARCH IN CHINA: IDENTIFYING THE OPTIMAL CUT OFF POINT
Journal Title: Asian Economic and Financial Review - Year 2016, Vol 6, Issue 1
Abstract
The rapid growth of the Chinese economy has resulted in Chinese listed companies entering numerous global supply chains, and thereby contributing to the globalization of economies. Accurately predicting corporate distress is a crucial concern for enterprises, managers, investors, creditors, and supervisors. In this study, data from the 2003-2013 (excluding 2008) was analyzed, and a logistic model was applied to analyze critical factors. We developed Special Treatment (ST) model to measure distress of companies listed in China. The results indicate that the optimal cut-off point (one, two, three and fourth quarters before a failure), and the debt ratios (one quarter before a failure) or unadjusted economic value added (two, three and fourth quarters before a failure) is superior in predicting corporate failure in China.
Authors and Affiliations
Zhen Jia Liu*| PHD at School of Business ,Changzhou University, Changzhou City, Jiangsu Providence, China, Yi Shu Wang| Associate Professor at School of Business ,Changzhou University, Changzhou City, Jiangsu Providence, China
CORPORATE FAILURE PREDICTION MODELS FOR ADVANCED RESEARCH IN CHINA: IDENTIFYING THE OPTIMAL CUT OFF POINT
The rapid growth of the Chinese economy has resulted in Chinese listed companies entering numerous global supply chains, and thereby contributing to the globalization of economies. Accurately predicting corporate distres...
CAUSALITY BETWEEN OIL CONSUMPTION AND ECONOMIC GROWTH IN OPEC COUNTRIES: A PANEL COINTEGRATION APPROACH
This paper examined the relationship between oil consumption and economic growth in OPEC countries within a panel cointegration and panel based error correction model by using data from 1980 – 2011. In this paper we use...
DERIVATIVE USE OF TURKISH INVESTMENT FUNDS DURING THE 2008-09 FINANCIAL CRISIS
This paper centers on the question of how derivatives were utilized by investment fund managers in the course of 2008-09 global financial crisis. In this vein, we analyze investment funds defined as mutual funds and inve...
VALUE DRIVERS TO MAXIMIZE STAKEHOLDER WORTH: THE CASE OF TAIWAN HIGH SPEED RAIL CORPORATION CUSTOMIZING
This study determined that the sustainable value of an enterprise involves not only financial performance but also nonfinancial performance. Therefore, intellectual capital (IC) and corporate social responsibility (CSR)...
GLOBAL ENERGY PRICES AND THE BEHAVIOR OF ENERGY STOCK PRICE FLUCTUATIONS
This study investigates the impact of global crude oil and global natural gas prices on the stocks price movements of the energy companies using multivariate regression and impulse response function analysis. Our data se...