Abstract
The objective of this study is to examine firm’s failure processes
(FFPs) by applying different clustering techniques on the dataset of
520 bankrupt manufacturing firms from various Asian countries and
divide them into two groups based on their governance scoring
reported by international governance index. The short-term failure is
quite high in countries where governance scoring is low while long
term failure is more prominent in high ranked countries. This shows
three motivated FFPs and in case of dominant FFP, the study finds
that firm’s default risk befits increase shortly even earlier the
bankruptcy is confirmed. The accumulated and annual profitability
of firm is the most significant predictor of firm’s failure risk for all
the three firms’ FFPs for the firms having failure probability more
than 50%. Results of the study provide an important breakthrough in
research of bankruptcy forecast and practices, precisely in terms of
exploring the most significant determinants. This study also fills the
gap by addressing the ignored area of constituents of failure risks
during various FFPs.
Saif-ur-Rehman, Hashim Khan, Sharif Ullah Jan. (2020) THE FIRM’s FAILURE PROCESSES IN ASIAN MAJOR ECONOMIES: THE APPLICATION OF CLUSTERING TECHNIQUES, Gomal University Journal of Research, Volume 36, Issue1.
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