Post COVID-19 financial distress in Pakistan: Prediction of corporate defaults at Pakistan Stock Exchange

Khan, Khalid Mumtaz; Ullah, Naeem

doi:10.47264/idea.lassij/5.1.25

Cited by 13 publications

(9 citation statements)

References 16 publications

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“…Le and Nguyen [31] evaluated the negative impact of the pandemic on small and medium enterprises (SMEs) by examining the role of corporate governance in SMEs and revealed that corporate governance principles moderated the link between COVID -19 and companies. Khan and Ullah [4] predicted possible financial distress and corporate defaults in Pakistan as a post COVID 19 review and found an increase in the degree of financial distress upon which they based their prediction as well as a likely increase in the number of corporate failures due to poor governance. Sivaprasad and Mathew [15] investigated the COVID -19 pandemic's impact on corporate governance in the United Kingdom (UK) and their findings revealed that many firms lag in IT-related risk control as an alternative to governance during the pandemic.…”

Section: Prior Studies On the Covid -19 Pandemic Corporate Governance...mentioning

confidence: 99%

“…Pandemic effects on companies must be thoroughly examined so that corrective and proactive measures can be implemented to protect against and avert future similar pandemics and other risks associated with the company's operations and governance [3]. Over the last few decades, corporate governance as a branch of financial management and as a pillar of company's performance and sustainability has faced several challenges [4]. There have been many crises in the past that had a detrimental effect on the world economy.…”

Section: Introductionmentioning

confidence: 99%

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The implications of the pandemic for the corporate governance, remuneration and sustainability performance of South African listed companies

Benson

Ganda

2023

ijirss

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The study examined the implications of the recent pandemic on the corporate governance, remuneration and corporate sustainability performance of South African listed companies. Data from 42 companies was analyzed using the panel fully modified ordinary least squares (FMOLS) and dynamic ordinary least squares (DOLS) methods from 2010-2021. Findings revealed that the pandemic negatively impacted the selected companies. This study revealed that the pandemic had a good impact on some companies and not just bad ones as claimed by previous researchers. Results from COVID -19- related expenses, debt-to-equity ratios and staff costs revealed a negative but significant result in the estimated model. Other variables such as current ratios, net profit margins and board diversity revealed a positive and significant relationship with all the dependent variables. Hence, a very severe implication of the pandemic on the performance of companies is confirmed through COVID -19related expenses, staff costs and directors’ remuneration. These have a very strong negative impact on the future performance, survival, and sustainability of the selected companies. Lastly, a strong relationship between corporate governance and corporate sustainability performance was confirmed as shown by ROA, board size, directors’ remunerations and board diversity. This study provides insight for stakeholders such as governments, directors and policymakers to develop both preventive and proactive policies to protect and guide companies from future similar pandemics. To avert and prevent future negative implications on companies, this study recommends a well- structured scheme for all of the company’s staff, cash reserves and IT governance.

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Section: Prior Studies On the Covid -19 Pandemic Corporate Governance...mentioning

confidence: 99%

Section: Introductionmentioning

confidence: 99%

The implications of the pandemic for the corporate governance, remuneration and sustainability performance of South African listed companies

Benson

Ganda

2023

ijirss

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“…Nonetheless, transformational leadership has a positive effect on the engagement of active and independent critical thinking in the telecom sector of Pakistan . However, the mediating relationship of behavioural integrity positively influences employee performance in the banking sector (Khan & Mahmood, 2023;Saleem et al, 2019).…”

Section: Introductionmentioning

confidence: 99%

Transformational leadership and employees' performance: the mediating role of employees' commitment in private banking sectors in Pakistan

Anwar,

Qambrani,

Shah

et al. 2023

Lib. Arts Soc. Sci. Int. J.

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In this competitive era, organisations face issues related to leadership styles in maintaining employee performance and commitment. Leadership, like transformational leadership, motivates employees to achieve the target for an organisation. However, employee performance and commitment are behavioural factors that help them achieve organisational goals. These factors develop emotional attachments like loyalty and faithfulness among the employees towards the organisations. This study examines the relationship between transformational leadership, employee commitment, and employee performance in a developing country like Pakistan. Although, in the twenty-first century, issues related to leadership styles have given new ways for researchers to further insight into employee performance and commitment study. However, this paper aims to determine the impact of transformational leadership on employee performance by mediating the role of employee commitment in the private banking sector. The cross-sectional and descriptive survey was used in the data collection; 466 employees of the banks participated in the study. The research indicates that transformational leadership positively impacts employee performance and commitment. The findings show that transformational leadership has a positive effect on employees' performance and employee commitment.

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“…Financial distress within the publicly listed firms is one of the symptoms of corporate default leading to bankruptcy and subsequent liquidation (Khan & Ullah, 2021). At firms' level, the early identification of financial distress within a firm helps its stakeholders to take preemptive measures for safeguarding their respective stake(s) n the firm (Opp, C. C., 2019).…”

Section: Introductionmentioning

confidence: 99%

Identification of Financial Distressed Firms at Pakistan Stock Exchange Through Infusion of Corporate Social Responsibility Information into Altman Z-Score

Mumtaz¹,

Mujtaba²,

Aman

2023

NIJBM

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Financial distress is one of the leading reasons for corporate default, foreclosure, and subsequent bankruptcy. Traditionally accounting information-based models have been used to identify the financially distressed firms. Inaccurate identification results in type-I and type- II errors. These errors are attributable to the elements of conservatism and prudence within the accounting information. Enclosure of market information into these models may reduce the quantum of errors and improve the existing ability of these models to accurately identify the financially distressed firms. This study has infused the Corporate Social Responsibility information into the Altman Z-Score. The enclosure has been made using additive index methodology, resulting in formation of a Composite Default Index. 161 non- financial firms listed on the Pakistan Stock Exchange have been taken as the sample over the study period of 2010-2016. The accuracy of Composite default Index has been found significantly better as compared to the Z-Score Default Index as the type-I and type-II errors are reduced by 41% and 132% respectively. This study has implication for the corporate regulators, practitioners, stakeholders and researchers in form of providing a better mechanism to identify the financially distressed firms, future studies may consider other forms of market information and the accounting information-based models to improve upon the same, further.

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Post COVID-19 financial distress in Pakistan: Prediction of corporate defaults at Pakistan Stock Exchange

Cited by 13 publications

References 16 publications

The implications of the pandemic for the corporate governance, remuneration and sustainability performance of South African listed companies

The implications of the pandemic for the corporate governance, remuneration and sustainability performance of South African listed companies

Transformational leadership and employees' performance: the mediating role of employees' commitment in private banking sectors in Pakistan

Identification of Financial Distressed Firms at Pakistan Stock Exchange Through Infusion of Corporate Social Responsibility Information into Altman Z-Score

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