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Corporate Financial Distress of Industry Level Listings in an Emerging Market

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Vo, Duc Hong and Pham, Binh Vo-Ninh and Pham, Trung Vu-Thanh and McAleer, Michael (2019) Corporate Financial Distress of Industry Level Listings in an Emerging Market. [ Documentos de Trabajo del Instituto Complutense de Análisis Económico (ICAE); nº 09, 2019, ISSN: 2341-2356 ]

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Abstract

Any critical analysis of the corporate financial distress of listed firms in international exchange would be incomplete without a serious dissection at the industry level because of the different levels of risks concerned. This paper considers the financial distress of listed firms at the industry level in Vietnam over the last decade. Two periods are considered, namely during the Global Financial Crisis (GFC) (2007 - 2009) and post-GFC (2010 - 2017). The logit regression technique is used to estimate alternative models based on accounting and market factors. The paper also extends the analysis to include selected macroeconomic factors that are expected to affect the corporate financial distress of listed firms at the industry level in Vietnam. The empirical findings confirm that the corporate financial distress prediction model, which includes accounting factors with macroeconomic indicators, performs much better than alternative models. In addition, the evidence confirms that the GFC had a damaging impact on each sector, with the Health & Education sector demonstrating the most impressive recovery post-GFC, and the Utilities sector recording a dramatic increase in bankruptcies post-GFC.


Item Type:Working Paper or Technical Report
Uncontrolled Keywords:Listed firms, Industry level, Corporate financial distress, Bankruptcy, Distance to default, Fundamentals, Global Financial Crisis, Vietnam.
Subjects:Sciences > Mathematics > Finance
Social sciences > Economics > World economy
JEL:F62, F65, G01, G31, G33, G34
Series Name:Documentos de Trabajo del Instituto Complutense de Análisis Económico (ICAE)
Volume:2019
Number:09
ID Code:54767
Deposited On:26 Mar 2019 12:55
Last Modified:26 Mar 2019 12:55

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