Corporate Governance and Credit Risk：Empirical Study of Family Business

• Main Authors: Mei-Fang Chang, 張美芳
• Other Authors: Hui-Fun Yu
• Format: Others
• Language: zh-TW
• Published: 2014
• Online Access: http://ndltd.ncl.edu.tw/handle/bj6mw7

碩士 === 健行科技大學 === 國際企業管理研究所 === 102 === This study used statistical method to determine the significant variables influencing the company performance and to analyze the differences for capital structure debt ratio greater than 50% and capital structure own funds ratio greater than 50%. It constructed a Financial Early-Warning Models for enterprises (especially for family business), and determines the factors that can predict the probability of financial crises more accurately, so as to achieve the effect of risk management and early warning. A total of 28 financial ratio variables and 4 corporate governance variables of listed and over-the-counter companies of family business between 2000 and 2012 were collected. The Pearson test and stepwise regression were used to remove high correlation and colinearity and to select significant variables. The Model I of capital structure debt ratio greater than 50% and the Model II of capital structure own funds ratio greater than 50% were built and estimated by logistic regression, in order to screen out the variables for financial early warning of family business. The results suggested that the enterprises with a debt ratio greater than 50% should increase the current ratio, quick ratio, cash flow adequacy ratio and earnings per share. Moreover, the profitability of enterprises needs to be enhanced to improve the financial structure, as well as to avoid the president serving as the general manager concurrently. Hence, the corporate governance capability can be improved and the probability of credit risks can be reduced. The enterprises with own funds ratio greater than 50% should increase the current ratio and operating profit margin, reduce the interest expense ratio, operating expense ratio and dependence on borrowing. Meanwhile, they should avoid changing the accountant, and set independent directors and supervisors as early as possible. They also need to avoid the president serving as the general manager concurrently, and enhance the corporate governance capability to increase the company performance. In terms of empirical value and managerial implications, the family business can reduce the probability of credit risks by implementing corporate governance, so as to reduce the credit granted risk assets of banking enterprises and to increase the BIS Ratio.