The Factors Causing Corporate Financial Distress: A comparison Between Economic Expansion and Economic Recession

• Main Authors: Tzu-yi Wu, 吳姿儀
• Other Authors: 沈中華
• Format: Others
• Language: zh-TW
• Published: 2016
• Online Access: http://ndltd.ncl.edu.tw/handle/4s36v5

碩士 === 國立臺灣大學 === 財務金融學研究所 === 104 === The topic about the prediction of corporate financial failure has far been discussed, no matter in Taiwan or abroad. The bankruptcy of a corporate not only directly affects its employees and suppliers, but all the society, especially for listed corporates. In this way, the purpose of this paper is to find out the factors that cause the corporate financial failure by using the financial signaling model. Since there is no unite definition of financial failure, this paper provides the reviews of definition of the financial failure. The definition of financial failure in this paper is defined by “Taiwan Economic Journal Databases “. In addition to financial ratios, to examine the effect of corporate governance and the macroeconomic on corporate financial failure, this paper also uses the variables such as “stock held by the board” and “ GDP growth ratio” to see how these two factors can affect the corporate failure. The other point of this paper is to find out if the economic cycle can make any change to the factors that cause the financial failure. Firstly, uses the economic cycles defined by Taiwan’s government and find out the companies suffered from financial failure in each period. The matching principle used in the paper is 1:3, that is one failure corporate with 3 normal corporates without financial failure. In this paper, Logit Model was used with the adoption of dummy variable in representative of economic expansion and recession. Also, this paper examines if there is any difference among the factors cause corporate financial distress between different industries. From the result, it’s obvious that the “Asset Turnover Ratio” plays an important role during the financial recession and the variables chosen in this paper are better indication of the reasons that cause financial failure to Electronics Industry. The importance and the necessity to discuss the reasons behind the corporate financial failure accords to the economic cycle and different industries are shown in the result.