Bankruptcy prediction during the IMF crisis: Evidence from Malaysian listed industrial companies

Sori, Zulkarnain Muhamad and Karbhari, Yusuf ORCID: https://orcid.org/0000-0003-4513-0928 2004. Bankruptcy prediction during the IMF crisis: Evidence from Malaysian listed industrial companies. [Working Paper]. Working Paper Series, Social Science Research Network: Social Science Electronic Publishing. Available at: http://papers.ssrn.com/sol3/papers.cfm?abstract_id...

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Abstract

This paper develops bankruptcy prediction model of considerable efficiency for firms listed and traded in a small developing economy. New findings reported in this paper help extend bankruptcy prediction literature to a different market setting. We find there are three relevant variables: total liabilities; current asset turnover; and cash ratios. The model correctly classified about nine-tenth of failed and non-failed firms in the original and holdout samples. The model predicts failure four years ahead. We also introduce a further sample comprising of those firms that had experienced financial distress between 1997-1998 (during the Asian Financial Crisis period) to assess model superiority. The predictive accuracy of the model reveals that it was significantly better than chance. Thus, these findings are somewhat different from those in the literature.

Item Type:	Monograph (Working Paper)
Date Type:	Publication
Status:	Published
Schools:	Business (Including Economics)
Subjects:	D History General and Old World > DS Asia H Social Sciences > HJ Public Finance
Uncontrolled Keywords:	Corporate distress, financial ratios, IMF crisis, prediction model, discriminant analysis
Publisher:	Social Science Electronic Publishing
Last Modified:	21 Oct 2022 10:11
URI:	https://orca.cardiff.ac.uk/id/eprint/39380

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