We document the distortionary effects of accounting-based regulation on reported earnings. In India only firms with negative book value of equity (networth) can seek bankruptcy protection. Using a novel dataset of bankrupt firms from India, we show that firms manage earnings downward to seek bankruptcy protection. Strengthening creditor rights reduces downward earnings management among non-grou...

In this paper, we empirically assess the role of individual social capital on personal bankruptcy and default outcomes in the consumer credit market. After controlling for a borrower’s risk score, debt, income, wealth, and legal and economic environments, we find that default/bankruptcy risk rises and then falls over the lifecycle, while a borrower who owns a home or is married has a lower risk...

Much has been written about the relationship between high medical expenses and the likelihood of filing for bankruptcy, but the relationship between receiving a cancer diagnosis and filing for bankruptcy is less well understood. We estimated the incidence and relative risk of bankruptcy for people age twenty-one or older diagnosed with cancer compared to people the same age without cancer by co...

This paper characterizes the optimal bankruptcy exemption for risk averse borrowers who use unsecured contracts but have the possibility of defaulting. It provides a novel general formula — which holds in a wide variety of environments — for the optimal exemption as a function of a few observable sufficient statistics. Knowledge of borrowers’ leverage, the sensitivity of the interest rate sched...

The aim of this study is to investigate the effects of corporate governance mechanisms in preventing the bankruptcy of companies listed in Tehran Stock Exchange. For this purpose, corporate governance mechanisms, including institutional ownership, non-executive members of the board, CEO dual responsibility and free float stock are determined as independent variables and Bankruptcy based on the ...

Over the last decade, the topic of bankruptcy has been an object of growing concern. In Canada, the number of business bankruptcies under the Bankruptcy Act has risen significantly since the beginning of the 1980s. From 6,595 in 1980, the number of bankruptcies rose to 8,664 in 1989, to 14,317 in 1992 to finally settle at 11,810 in 1994.1 In addition, a large but uncertain number of business fa...

Corporate bankruptcy prediction is a usual problem found in financing and management. In this paper a new approach is proposed based on Machine Learning and Fuzzy Logic. Our attempt, finally, results in a useful fuzzy system, which can be used in order to classify firms into efficient and inefficient ones.

The aim of this study is to investigate the effects of corporate governance mechanisms in preventing the bankruptcy of companies listed in Tehran Stock Exchange. For this purpose, corporate governance mechanisms, including institutional ownership, non-executive members of the board, CEO dual responsibility and free float stock are determined as independent variables and Bankruptcy based on the ...

Bankruptcy prediction is an important classification problem for a business, and has become a major concern of managers. In this paper, two well-known backpropagation neural network models serving as data mining tools for classification problems are employed to perform bankruptcy forecasting: one is the backpropagation multi-layer perceptron, and the other is the radial basis function network. ...

When resources are divided among agents, the characteristics of the agents are taken into consideration. A simple example is the bankruptcy problem, where the liquidation value of a bankrupt firm is divided among the creditors based on their claims. We characterize division rules under which no group of agents can increase the total amount they receive by transferring their characteristics with...