• The Journal of Asian Finance, Economics and Business
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• v.10 no.2
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• pp.175-181
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• 2023

Competition assures improved products and services to meet customers' needs. The soundness of a firm's financial health is crucial for the country's economic well-being. Distressed companies cause investor panic, which has a knock-on effect on the economy and leads to a deterioration in the image and value of the companies. This paper aims to empirically investigate the influence of competition on financial distress (FD) in the healthcare industry using the Altman Zscore values as the proxy for FD. This study uses secondary data from ten healthcare companies operating in India between 2016 and 2020. The study's findings indicate a significant negative relation with the exogenous variables of the study, implying that a higher level of competition enhances a firm's FD or adversely affects financial health. The main implication of the study is two-pronged. Firstly, the firms' managers and decision-makers need not worry about competition as a deterrent to stability. Secondly, the policymakers need not be concerned that high competition may lead to financial stress for the firms. Therefore, this paper concludes that competition is good for firms operating in India.

• The Journal of Asian Finance, Economics and Business
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• v.8 no.1
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• pp.573-585
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• 2021

The banking sector is one of the most important sectors in Pakistan's struggling economy. Recent studies have recommended that suitable methods can be applied to predict bankruptcy. In this context, this work analyzes Pakistan's banking sector's financial status through the five-factor Altman Z-score model, which determines the probability of bankruptcy for an organization. Banking data has been collected through the Pakistan Stock Exchange (PSX) in the period 2013-2017. The Z-score assessment criteria is defined as: Z> 2.99 - "safe" zone; Z> 1.8 Z>2.98- "grey" zone; and Z <1.8 - "distress" zone. Results show good predictions for the local banking industry, while most foreign Pakistani banks were found bankrupt with the Z-score below 1.1. One of the financial risks investors face when investing in any company is the risk of bankruptcy. One of the most used models for predicting financial distress for any company is Altman's Z-score model. On the other hand, the Z-score analysis suggests that all banking establishments are not bankrupt because they have sufficient ability to control bankruptcy. At the same time, foreign banks failed financially and would not be able to be sustained in the future because they do not have the ability to pay the short-term and long-term debt.

• Journal of Information Processing Systems
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• v.15 no.3
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• pp.682-693
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• 2019

The traditional classification methods mostly assume that the data for class distribution is balanced, while imbalanced data is widely found in the real world. So it is important to solve the problem of classification with imbalanced data. In Mahalanobis-Taguchi system (MTS) algorithm, data classification model is constructed with the reference space and measurement reference scale which is come from a single normal group, and thus it is suitable to handle the imbalanced data problem. In this paper, an improved method of MTS-CBPSO is constructed by introducing the chaotic mapping and binary particle swarm optimization algorithm instead of orthogonal array and signal-to-noise ratio (SNR) to select the valid variables, in which G-means, F-measure, dimensionality reduction are regarded as the classification optimization target. This proposed method is also applied to the financial distress prediction of Chinese listed companies. Compared with the traditional MTS and the common classification methods such as SVM, C4.5, k-NN, it is showed that the MTS-CBPSO method has better result of prediction accuracy and dimensionality reduction.

• The Journal of Asian Finance, Economics and Business
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• v.8 no.1
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• pp.665-673
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• 2021

Default has become an extreme concern in the current world due to the financial crisis. The previous prediction of companies' bankruptcy exhibits evidence of decision assistance for financial and regulatory bodies. Notwithstanding numerous advanced approaches, this area of study is not outmoded and requires additional research. The purpose of this research is to find the best classifier to detect a company's default risk and bankruptcy. This study used secondary data from the Pakistan Stock Exchange (PSX) and it is time-series data to examine the impact on the determinants. This research examined several different classifiers as per their competence to properly categorize default and non-default Pakistani companies listed on the PSX. Additionally, PSX has remained consistent for some years in terms of growth and has provided benefits to its stockholders. This paper utilizes machine learning techniques to predict financial distress in companies listed on the PSX. Our results indicate that most multi-stage mixture of classifiers provided noteworthy developments over the individual classifiers. This means that firms will have to work on the financial variables such as liquidity and profitability to not fall into the category of liquidation. Moreover, Adaptive Boosting (Adaboost) provides a significant boost in the performance of each classifier.

• Journal of Distribution Science
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• v.16 no.11
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• pp.21-27
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• 2018

Purpose - This study investigates the financial ratio of savings banks and the effect of the ratio having influence upon bankruptcy by quantitative empirical analysis of forecast model to give material of better management and objective evidence of management strategy and way of advancement and risk control. Research design, data, and methodology - The author added two growth indexes, three fluidity indexes, five profitability indexes, and four activity indexes CAMEL rating to not only the balance sheets but also the income statement of thirty savings banks that suspended business from 2011 to 2015 and collected fourteen financial ratio indexes. IBMSPSS VER. 21.0 was used. Results - Variables having influence upon bankruptcy forecast models included total asset increase ratio and operating income increase ratio of growth index and sales to account receivable ratio, and tangible equity ratio and liquidity ratio of liquidity ratio. The study selected total asset operating ratio, and earning and expenditure ratio from profitability index, and receivable turnover ratio of activity index. Conclusions - Financial supervising system should be improved and financial consumers should be protected to develop saving bank and to control risk, and information on financial companies should be strengthened.

• The Journal of Asian Finance, Economics and Business
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• v.7 no.12
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• pp.181-193
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• 2020

This study examines the relationship between gender diversity (women on the board and women on the audit committee) and a firm's financial stability. The ordinary least square analysis was used to determine the relationship. To measure the financial stability of Malaysian suspect firms, i.e., firms with the lowest positive earnings, the Altman (1993) Z-Score measurement was utilized. The results indicate that women on the board are significantly and negatively associated with the firm's financial stability. That is, they are related to low financial stability, which contradicts the agency and resource dependence theories. Regarding women directors on the audit committee, there is no significant relationship with financial stability, meaning that they cannot protect the company against financial distress. These results are robust and do not change when using different measurements of gender diversity, one-year lag of independent variables, and other methods of analysis, namely random effect panel data. This study is the first to alert policymakers, stakeholders, researchers, and society in general to the need to re-evaluate and strengthen the role of women directors in improving firms' financial stability, particularly in emerging economies like Malaysia.

• The Journal of Asian Finance, Economics and Business
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• v.8 no.5
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• pp.179-188
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• 2021

The purpose of this study is to examine the level of aggressive tax planning (ATP) among companies listed in the Access, Certainty, Efficiency (ACE) Market of Bursa Malaysia. On top of that, this study also investigates the relationship between company characteristics, ethnicity, and ATP. This study uses a balanced pooled sample of 105 firm years-observations for the period from 2014 to 2018. These samples were selected to provide new insight into this market and to explore the attitude of small firms toward ATP in Malaysia. The data was retrieved from DataStream and the downloaded annual reports. The finding shows that profitability and financial distress have a significant relationship with ATP. Other variables including size, capital intensity, inventory intensity, leverage, and ethnicity, were not determinants of ATP. The result in this study may assist the reader in understanding the nature of companies in the ACE market, particularly on its behavior toward tax planning. A strict requirement is needed to be adopted in the sample selection process, thus limiting the sample size. Further, since the previous study focused on large companies, the discussion of this paper will provide new insight into the nature of tax planning within the small- and medium-sized companies in Malaysia.

• The Journal of Asian Finance, Economics and Business
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• v.4 no.1
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• pp.39-49
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• 2017

This study develops an early warning system (EWS) to prevent the banking crisis. The proposed system incorporates both the perspective of crises and fundamental characteristics of the banking system in each economy. A fuzzy logic method with data from 1990-2009 is employed to construct the EWS of banking crisis based on 21 pre-determined variables from the aspect of total economy, financial and banking sectors. Our results show: Firstly, South Korea recorded higher probability to have a banking crisis in 1997 as there was large foreign debt in dollars. Secondly, China, Australia and New Zealand banking systems appear to be vulnerable to the crisis in 2007. The surge of China export, FDIs and booming stock market were signs of a heated economy. Australia with high commodity prices was also vulnerable to crisis. Thirdly, Australia, China, Japan and New Zealand banking systems appear to be exposed to the higher chance of a crisis in 2010. Japan with deflation coupled with expensive yen did not augur well for its export. Overall, the findings show that in Asian Financial Crisis 1997/98 and Global Financial Crisis 2008/09, many economies are exposed to a higher probability of having the crisis and this shows an urgent need of having surveillance in these economies.

• Journal of Distribution Science
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• v.21 no.6
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• pp.83-89
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• 2023

Purpose: This paper considers the issue of corporate tax avoidance (CTA) in the distribution of the tax burden across companies in Vietnam because the high level of CTA leads to unfairness in taxation. In particular, we aim for discussing the way to measure the extent of CTA and explore the determinants of CTA that reflect the features of high-tax risk-taking companies. Research design, data and methodology: The study investigates factors influencing the CTA behavior of legal entities listed on the Vietnam stock market between 2012 and 2018 to fill the empirical research vacuum in the country. we employ the dynamic GMM estimate method. Interestingly, CTA is considered through three approaches, including two effective-tax-rate-based methods and especially accrual earnings Results: The results highlight tax - accounting book disparities have significant effects on CTA. In addition, firm size, net asset value, debt leverage, and tax-accounting books are related to CTA. Conclusions: Tax avoidance is shown to have a positive correlation with financial distress in this case. The higher a company's capital adequacy ratio, the fewer tax avoidance opportunities it has. The paper draws some recommendations to deal with tax avoidance that improves the fairness in the distribution of the tax burden among corporations.

• The Journal of Asian Finance, Economics and Business
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• v.7 no.2
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• pp.53-64
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• 2020

We provide one of the first investigation on the impact of the degree of total leverage to the dividend policy of bank. We use a large sample of US bank holding companies from 2000:Q1 to 2017:Q4 to shed light our research question. Our empirical analysis provides consistent evidence that banks with high degree of total leverage (i.e. banks with a relatively high fixed-to-variables costs) are less likely to pay dividends, and they spend a lower fraction of incomes to pay back shareholders, suggesting a higher conservatism in dividend policy of banks subject to high degree of total leverage. The evidence remains unchanged with alternative econometric approaches, alternative measures of dividend policy and degree of total leverage. We further document that this higher conservatism is strengthened for a sample of banks with low franchise value during the financial crises. Our result suggests that the conservatism in dividend policy of banks with high degree of total leverage seems to be related to the precautionary motives aimed at preserving corporate resources under financial distress. Our study contributes to the literature of cost structure and dividend policy by pointing out that the impacts of the degree of fixed-to-variable expenses to dividend policy are extended to the case of banks.