Determinants and consequences of financial distress: review of the empirical literature

By Ahsan Habib, Mabel D. Costa, H. Huang, Md. Borhan Uddin Bhuiyan, Li Sun. Accounting and Finance, 2018

198 citations recorded by the source corpus.

We synthesise the empirical literature on the determinants and consequences of financial distress, critique the findings and offer suggestions for future research. We categorise these indicators into (i) firm‐level fundamental determinants, (ii) macroeconomic determinants and (iii) firm‐level corporate governance determinants. We categorise the consequences into (i) financial reporting and auditing consequences, (ii) firm‐level operational consequences, (iii) capital market consequences and (iv) corporate governance consequences. We suggest that future research can make a more meaningful contribution, by developing more comprehensive models of predicting financial distress which will entail a departure from the current partial analysis to a more holistic complex analysis.

Subfields: Accounting

View Paper: https://www.semanticscholar.org/paper/0c7a87b07705cca62b4a8ff5865b71b44686200c