Shareholder primacy corporate governance and financial market growth

Samanta, Navajyoti; Johnston, Andrew

doi:10.1108/cg-10-2019-385

Cited by 15 publications

(19 citation statements)

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“…Financial distress is usually regarded as the embarrassing situation of not being able to pay mature debts or expenses, which involves liquidity problems, insufficiency of equity, default debts and lack of current assets (Hui and Jing-Jing, 2008). Financial distress can force the firms into bankruptcy or forced liquidation (Samanta and Johnston, 2019). Financially distressed companies are unable to payout their financial obligations to the creditors.…”

Section: Introductionmentioning

confidence: 99%

Corporate governance and financial distress: Asian emerging market perspective

Younas

Uddin

Awan

et al. 2021

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Purpose The purpose of this paper is to examine the impact of corporate governance index (PAKCGI) on firm financial distress for a sample of 152 non-financial firms listed at Pakistan Stock Exchange (PSX) over the period from 2003 to 2017. Design/methodology/approach To examine the impact of PAKCGI on financial distress (Altman Z-Score), random effect model is applied. The PAKCGI is a self-constructed index based on the five important factors of corporate governance practices, i.e. board of directors, audit committees, right of shareholders, disclosures and risk management. The binary coding approach is adopted for the construction of PAKCGI. Altman Z-Score model is used as a proxy for financial distress indicator. The absolute value of Altman Z-score has been taken as financial distress indicator. Findings The outcomes of the study indicate a positive impact of PAKCGI on risk of firms’ financial distress. The positive coefficient of PAKCGI implies that the good corporate practices work as catalyst to reduce risk of financial distress in Pakistan. A significant negative impact of block holders on financial distress suggests that the concentrated block ownership take monopolistic decision to protect their interests. It has also been observed that significant positive impact of institutional ownership on financial distress exists in the Pakistani listed firms. Furthermore, this study also reveals that significant negative association between board size, CEO duality and financial distress indicator. Research limitations/implications The findings may encourage the Pakistani listed companies to follow and implement good corporate governance practices, which would lead to increase the confidence of investors, regulators and stakeholders. Originality/value The current study extends the corporate governance literature by examining the relationship between the corporate governance attributes and the financial distress status of Pakistani listed companies. From the academic perspective, this paper adds to the knowledge concerning the association between corporate governance practices and risk of financial distress in emerging markets.

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Section: Introductionmentioning

confidence: 99%

Corporate governance and financial distress: Asian emerging market perspective

Younas

Uddin

Awan

et al. 2021

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“…default hutang dan kurangnya aset lancar (Hui & Jing-Jing, 2008). Kesulitan keuangan dapat memaksa perusahaan untuk bangkrut atau likuidasi paksa (Samanta & Johnston, 2019)…”

Section: Pendahuluanunclassified

Analisis Financial Distress Pada Pt. Wijaya Karya Dan Pt. Adhi Karya Yang Terdaftar Sebagai Perusahaan Bumn Indonesia

Darmawan

2022

JBA

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This study aims to provide empirical evidence related to the potential for financial distress experienced by State-Owned Enterprises. Through this research, a description of the potential financial distress experienced by PT Wijaya Karya (Persero) Tbk and PT Adhi Karya (Persero) Tbk can be obtained during the period 2010 - 2019. The Financial distress prediction model uses the Altman Model (Z-Score) and Springate Model (S-Score). The results show that from 2010 – 2019, PT Wijaya Karya (Persero) Tbk is still in a healthy condition so that the possibility of going bankrupt is very small. However, year by year, the condition of PT Wijaya Karya (Persero) Tbk is still in a gray condition where in this condition the company is prone to bankruptcy and experiencing financial problems that must be handled by the company's management appropriately. Meanwhile, PT Adhi Karya (Persero) from 2010 – 2019 showed the potential for financial distress which was strengthened by an unhealthy balance sheet because most of the funding sources came from debt. This study shows that the potential for financial distress arises because of a shift in government policy in development

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“…Menurut, Hui & Jing-jing (2008) Kesulitan keuangan biasanya dianggap sebagai situasi yang menyedihkan karena perusahaan tidak mampu membayar hutang atau biaya jatuh tempo, yang melibatkan masalah likuiditas, ketidakcukupan ekuitas, gagal membayar hutang dan kurangnya aset lancar perusahaan. Terjadinya kesulitan keuangan dapat mengakibatkan kebangkrutan atau terjadinya likuidasi paksa (Samanta & Johnston, 2019). Perusahaan yang mengalami kesulitan keuangan tidak dapat membayar kewajiban keuangan mereka kepada kreditor.…”

Section: Pendahuluanunclassified

Corporate Governance dan Kesulitan Keuangan: Perspektif di Indonesia.

Sumayyah

Sulistiyantoro

2022

Wahana

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The aims of this study is to get empirical evidence regarding corporate governance on the financial distress of firms listed in Indonesia Stock Exchange (IDX). The sample used was 1527 public firms listed in the Indonesia Stock Exchange from 2018 until 2020. The data analysis technique used is multiple linear regression analysis using eviews statistic. The results show that three proxies of corporate governance have a positive effect and the other three have a negative effect on the financial distress. Three proxies that have a positive effect on financial distress is family ownership, institutional ownership and board independence. Three proxies that have a negative effect on financial distress is foreign ownership, public ownership and board size. This srtudy is expected to describe the mechanism of corporate governance, especially companies experiencing financial distress in the midst of the Covid-19 pandemic and economic instability in Indonesia so as to increase shareholder value.

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Shareholder primacy corporate governance and financial market growth

Cited by 15 publications

References 0 publications

Corporate governance and financial distress: Asian emerging market perspective

Corporate governance and financial distress: Asian emerging market perspective

Analisis Financial Distress Pada Pt. Wijaya Karya Dan Pt. Adhi Karya Yang Terdaftar Sebagai Perusahaan Bumn Indonesia

Corporate Governance dan Kesulitan Keuangan: Perspektif di Indonesia.

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