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Forecasting financial problems in emerging capital markets

The advent of the Asian Financial Crisis (AFC) in the Southeast Asia in 1997 is an appealing case for research work in assessing corporate financial distress. From international perspective, AFC is a product of contagion effect that spread from Thailand and consequently to the other Asian countries....

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Main Authors: Muhamad Sori, Zulkarnain, Abdul Hamid, Mohamad Ali, Md Nassir, Annuar
Format: Article
Language:English
Published: Eurojournals 2006
Online Access:http://psasir.upm.edu.my/id/eprint/18133/1/Forecasting%20financial%20problems%20in%20emerging%20capital%20markets.pdf
http://psasir.upm.edu.my/id/eprint/18133/
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spelling my.upm.eprints.181332016-02-04T03:40:40Z http://psasir.upm.edu.my/id/eprint/18133/ Forecasting financial problems in emerging capital markets Muhamad Sori, Zulkarnain Abdul Hamid, Mohamad Ali Md Nassir, Annuar The advent of the Asian Financial Crisis (AFC) in the Southeast Asia in 1997 is an appealing case for research work in assessing corporate financial distress. From international perspective, AFC is a product of contagion effect that spread from Thailand and consequently to the other Asian countries. Domestically, the AFC has resulted a sudden economic slump and corporate failures in these economies. This paper examines the corporate failure before the 1997 Asian Financial Crisis in three emerging capital markets namely Malaysia, Singapore and Thailand, and develops, tests, and analyses a model for classifying and predicting financial distress. A failure classification model based on multiple discriminant analysis was utilised to classify listed corporations from these countries for the 1980 to 1996 period. The model is tested on a sample of 33 Malaysian, 17 Singaporean and 52 Thailand failed firms and similar number of non-failed firms in the respective countries as a control sample. The failure prediction model developed successfully discriminates between failed and non-failed listed firms at the rate of 86%, 82% and 71% of Malaysian, Singaporean and Thailand firms respectively. Further validation of findings show that the predictive accuracy was significantly better than chance. © EuroJournals Publishing, Inc. 2006. Eurojournals 2006 Article PeerReviewed application/pdf en http://psasir.upm.edu.my/id/eprint/18133/1/Forecasting%20financial%20problems%20in%20emerging%20capital%20markets.pdf Muhamad Sori, Zulkarnain and Abdul Hamid, Mohamad Ali and Md Nassir, Annuar (2006) Forecasting financial problems in emerging capital markets. European Journal of Economics, Finance and Administrative Sciences (5). pp. 7-19. ISSN 1450-2275
institution Universiti Putra Malaysia
building UPM Library
collection Institutional Repository
continent Asia
country Malaysia
content_provider Universiti Putra Malaysia
content_source UPM Institutional Repository
url_provider http://psasir.upm.edu.my/
language English
description The advent of the Asian Financial Crisis (AFC) in the Southeast Asia in 1997 is an appealing case for research work in assessing corporate financial distress. From international perspective, AFC is a product of contagion effect that spread from Thailand and consequently to the other Asian countries. Domestically, the AFC has resulted a sudden economic slump and corporate failures in these economies. This paper examines the corporate failure before the 1997 Asian Financial Crisis in three emerging capital markets namely Malaysia, Singapore and Thailand, and develops, tests, and analyses a model for classifying and predicting financial distress. A failure classification model based on multiple discriminant analysis was utilised to classify listed corporations from these countries for the 1980 to 1996 period. The model is tested on a sample of 33 Malaysian, 17 Singaporean and 52 Thailand failed firms and similar number of non-failed firms in the respective countries as a control sample. The failure prediction model developed successfully discriminates between failed and non-failed listed firms at the rate of 86%, 82% and 71% of Malaysian, Singaporean and Thailand firms respectively. Further validation of findings show that the predictive accuracy was significantly better than chance. © EuroJournals Publishing, Inc. 2006.
format Article
author Muhamad Sori, Zulkarnain
Abdul Hamid, Mohamad Ali
Md Nassir, Annuar
spellingShingle Muhamad Sori, Zulkarnain
Abdul Hamid, Mohamad Ali
Md Nassir, Annuar
Forecasting financial problems in emerging capital markets
author_facet Muhamad Sori, Zulkarnain
Abdul Hamid, Mohamad Ali
Md Nassir, Annuar
author_sort Muhamad Sori, Zulkarnain
title Forecasting financial problems in emerging capital markets
title_short Forecasting financial problems in emerging capital markets
title_full Forecasting financial problems in emerging capital markets
title_fullStr Forecasting financial problems in emerging capital markets
title_full_unstemmed Forecasting financial problems in emerging capital markets
title_sort forecasting financial problems in emerging capital markets
publisher Eurojournals
publishDate 2006
url http://psasir.upm.edu.my/id/eprint/18133/1/Forecasting%20financial%20problems%20in%20emerging%20capital%20markets.pdf
http://psasir.upm.edu.my/id/eprint/18133/
_version_ 1643826717472587776
score 13.211869

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