Corporate Financial Distress of Industry Level Listings in an Emerging Market

Duc Hong Vo, Binh Vo-Ninh Pham, Trung Vu-Thanh Pham and Michael McAleer
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Duc Hong Vo: Business and Economics Research Group Ho Chi Minh City Open University, Vietnam.
Binh Vo-Ninh Pham: Business and Economics Research Group Ho Chi Minh City Open University, Vietnam.
Trung Vu-Thanh Pham: Curtin University, Australia.

No 2019-09, Documentos de Trabajo del ICAE from Universidad Complutense de Madrid, Facultad de Ciencias Económicas y Empresariales, Instituto Complutense de Análisis Económico

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.

Keywords: Listed firms; Industry level; Corporate financial distress; Bankruptcy; Distance to default; Fundamentals; Global Financial Crisis; Vietnam. (search for similar items in EconPapers)
JEL-codes: F62 F65 G01 G31 G33 G34 (search for similar items in EconPapers)
Pages: 35 pages
Date: 2019-03
New Economics Papers: this item is included in nep-sea
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Working Paper: Corporate Financial Distress of Industry Level Listings in an Emerging Market (2019)
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