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Bankruptcy and Corporate Governance: The impact of firm specific factors and macroeconomic

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  • Yim, Chin Shin

Abstract

The aim of this study is to identify the cause of scandals that faced by Malaysia Airlines Berhad (MAS) in year 2001. One of the causes of this scandals is about corporate scandals. A corporate scandal means that it is involves alleged or actual unethical behavior by people acting within or on behalf of a corporation. Many recent corporate collapses and scandals have involved false or inappropriate accounting of some sort. Besides that, this study was carried out using the secondary data which was obtained from annual report for five years that is from years 1999 until year 2003. Return on asset (ROA) has been as the dependent variable to study its relationship with the independent variables such as Return on equity (ROE), Unemployment rate, Exchange rate, corporate governance index, Tobin Q and Altman Z. The enter method was used to obtain the correlation and regression result to observe significance level of the risk with the profits. And the Altman Z data is used to identify the probability of bankruptcy in this five years because of the scandals that face by MAS. Based on the result attained, the regression result show that the company of MAS might facing the bankruptcy problem in year 2000 until 2002 where the financial performance is low. While the loan of the company is higher. This causes can refers to data of ROA, ROE and Altman Z where the data of Altman Z show that in year 2002 is lower.

Suggested Citation

  • Yim, Chin Shin, 2019. "Bankruptcy and Corporate Governance: The impact of firm specific factors and macroeconomic," MPRA Paper 93860, University Library of Munich, Germany.
    • Handle: RePEc:pra:mprapa:93860
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    File URL: https://mpra.ub.uni-muenchen.de/93860/1/MPRA_paper_93860.pdf
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    References listed on IDEAS

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    1. Agrawal, Anup & Chadha, Sahiba, 2005. "Corporate Governance and Accounting Scandals," Journal of Law and Economics, University of Chicago Press, vol. 48(2), pages 371-406, October.
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    More about this item

    Keywords

    Corporate Governance Index; ROA; ROE; Altman Z; Tobin Q; Unemployment rate; Exchange rate.;
    All these keywords.

    JEL classification:

    • B22 - Schools of Economic Thought and Methodology - - History of Economic Thought since 1925 - - - Macroeconomics
    • G3 - Financial Economics - - Corporate Finance and Governance
    • G33 - Financial Economics - - Corporate Finance and Governance - - - Bankruptcy; Liquidation

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