The impact of board of directors' characteristics on financial distress: empirical evidence from Egypt using logit and discriminant analysis models
Other Title(s)
أثر خصائص مجلس الإدارة على العسر المالي: دليل عملي من مصر باستخدام نماذج التحليل المتمايز واللوجيستي
Author
Source
Scientific Journal for Financial and Commercial Studies and Researches
Issue
Vol. 3, Issue 1، ج. 1 (31 Jan. 2022), pp.206-234, 29 p.
Publisher
Damietta University Faculty of Commerce
Publication Date
2022-01-31
Country of Publication
Egypt
No. of Pages
29
Main Subjects
Topics
Abstract EN
Purpose: This paper aims at investigating financial distress and explore the nature of the relationship between board of director's characteristics and financial distress in the Egyptian economy from 2015-2018.
Design /methodology / approach: To determine the best suitable model to express data, two models were employed in this research.
The first model is multivariate discriminant analysis model introduced by Altman and Hotchkiss (2010) and logit model.
Findings: Our results suggest that the proportion of independent directors and CEO duality are found to be significant determinants for financial distress.
However, board size is not a significant variable in predicting financial distress.
These results have been confirmed using logistic model.
On the other hand, discriminant model reveals that all the explanatory variables are significant in explaining financial distress.
Increasing board size increases the probability of financial distress while CEO duality and board independence have a positive impact on financial distress probability.
Depending on different criteria (R2, classification table, ROC curve) to compare between logit model and discriminant model, it has been revealed that logit model is better in explaining financial distress.
Originality/ value: This article is one of the first to investigate whether board of directors' attributes contribute to explain of the occurrence of financial distress in the context of Egypt's economy.
American Psychological Association (APA)
Hasan, Sarah Subhi Muhammad. 2022. The impact of board of directors' characteristics on financial distress: empirical evidence from Egypt using logit and discriminant analysis models. Scientific Journal for Financial and Commercial Studies and Researches،Vol. 3, no. 1، ج. 1, pp.206-234.
https://search.emarefa.net/detail/BIM-1504431
Modern Language Association (MLA)
Hasan, Sarah Subhi Muhammad. The impact of board of directors' characteristics on financial distress: empirical evidence from Egypt using logit and discriminant analysis models. Scientific Journal for Financial and Commercial Studies and Researches Vol. 3, no. 1, p. 1 (Jan. 2022), pp.206-234.
https://search.emarefa.net/detail/BIM-1504431
American Medical Association (AMA)
Hasan, Sarah Subhi Muhammad. The impact of board of directors' characteristics on financial distress: empirical evidence from Egypt using logit and discriminant analysis models. Scientific Journal for Financial and Commercial Studies and Researches. 2022. Vol. 3, no. 1، ج. 1, pp.206-234.
https://search.emarefa.net/detail/BIM-1504431
Data Type
Journal Articles
Language
English
Notes
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Record ID
BIM-1504431