Predicting Financial Distress in the Hong Kong Growth Enterprises Market from the Perspective of Financial Sustainability

    Research output: Contribution to journalArticle

    8 Citations (Scopus)

    Abstract

    The present study, according to our knowledge, is the first attempt to establish a financial distress prediction model for a unique set of enterprises, which are the enterprises listed on the specialized Hong Kong Growth Enterprise Market. It also makes an analysis of corporate financial sustainability and its relationship to financial distress prediction. The logistic regression and jackknife method are used to test the predictability of various models with data drawn from the Growth Enterprise Market for the years 2000–2010. The study finds that a model that includes firm-specific financial variables, firm-specific non-financial variables and a macro-economic variable is a better predictor of financial distress than is a model that includes only the first set of variables or a model that includes the latter two sets of variables. It also finds that a model that includes the latter two sets of variables is a better predictor of financial distress than is a model that includes only the first set of variables. These findings are vital for financial sustainability, as investors, policymakers, auditors and stakeholders of this market would find the conclusions emanating from the study extremely useful.
    Original languageEnglish
    Pages (from-to)1186-1200
    Number of pages15
    JournalSustainability
    Volume7
    Issue number2
    DOIs
    Publication statusPublished - 2015

    Fingerprint

    Sustainable development
    Hong Kong
    sustainability
    market
    Industry
    firm
    prediction
    macroeconomics
    investor
    Macros
    Logistics
    logistics
    stakeholder
    regression
    Economics

    Cite this

    @article{4adfb94e6bfc4dfab69ea287c8cbb67d,
    title = "Predicting Financial Distress in the Hong Kong Growth Enterprises Market from the Perspective of Financial Sustainability",
    abstract = "The present study, according to our knowledge, is the first attempt to establish a financial distress prediction model for a unique set of enterprises, which are the enterprises listed on the specialized Hong Kong Growth Enterprise Market. It also makes an analysis of corporate financial sustainability and its relationship to financial distress prediction. The logistic regression and jackknife method are used to test the predictability of various models with data drawn from the Growth Enterprise Market for the years 2000–2010. The study finds that a model that includes firm-specific financial variables, firm-specific non-financial variables and a macro-economic variable is a better predictor of financial distress than is a model that includes only the first set of variables or a model that includes the latter two sets of variables. It also finds that a model that includes the latter two sets of variables is a better predictor of financial distress than is a model that includes only the first set of variables. These findings are vital for financial sustainability, as investors, policymakers, auditors and stakeholders of this market would find the conclusions emanating from the study extremely useful.",
    keywords = "Financial distress, prediction, Growth Enterprise Market, financial sustainability, financial variable, non-financial variable, macro-economic variable.",
    author = "Hui Hu and Milind SATHYE",
    year = "2015",
    doi = "10.3390/su7021186",
    language = "English",
    volume = "7",
    pages = "1186--1200",
    journal = "Sustainability (Switzerland)",
    issn = "2071-1050",
    publisher = "MDPI AG",
    number = "2",

    }

    Predicting Financial Distress in the Hong Kong Growth Enterprises Market from the Perspective of Financial Sustainability. / Hu, Hui; SATHYE, Milind.

    In: Sustainability, Vol. 7, No. 2, 2015, p. 1186-1200.

    Research output: Contribution to journalArticle

    TY - JOUR

    T1 - Predicting Financial Distress in the Hong Kong Growth Enterprises Market from the Perspective of Financial Sustainability

    AU - Hu, Hui

    AU - SATHYE, Milind

    PY - 2015

    Y1 - 2015

    N2 - The present study, according to our knowledge, is the first attempt to establish a financial distress prediction model for a unique set of enterprises, which are the enterprises listed on the specialized Hong Kong Growth Enterprise Market. It also makes an analysis of corporate financial sustainability and its relationship to financial distress prediction. The logistic regression and jackknife method are used to test the predictability of various models with data drawn from the Growth Enterprise Market for the years 2000–2010. The study finds that a model that includes firm-specific financial variables, firm-specific non-financial variables and a macro-economic variable is a better predictor of financial distress than is a model that includes only the first set of variables or a model that includes the latter two sets of variables. It also finds that a model that includes the latter two sets of variables is a better predictor of financial distress than is a model that includes only the first set of variables. These findings are vital for financial sustainability, as investors, policymakers, auditors and stakeholders of this market would find the conclusions emanating from the study extremely useful.

    AB - The present study, according to our knowledge, is the first attempt to establish a financial distress prediction model for a unique set of enterprises, which are the enterprises listed on the specialized Hong Kong Growth Enterprise Market. It also makes an analysis of corporate financial sustainability and its relationship to financial distress prediction. The logistic regression and jackknife method are used to test the predictability of various models with data drawn from the Growth Enterprise Market for the years 2000–2010. The study finds that a model that includes firm-specific financial variables, firm-specific non-financial variables and a macro-economic variable is a better predictor of financial distress than is a model that includes only the first set of variables or a model that includes the latter two sets of variables. It also finds that a model that includes the latter two sets of variables is a better predictor of financial distress than is a model that includes only the first set of variables. These findings are vital for financial sustainability, as investors, policymakers, auditors and stakeholders of this market would find the conclusions emanating from the study extremely useful.

    KW - Financial distress

    KW - prediction

    KW - Growth Enterprise Market

    KW - financial sustainability

    KW - financial variable

    KW - non-financial variable

    KW - macro-economic variable.

    U2 - 10.3390/su7021186

    DO - 10.3390/su7021186

    M3 - Article

    VL - 7

    SP - 1186

    EP - 1200

    JO - Sustainability (Switzerland)

    JF - Sustainability (Switzerland)

    SN - 2071-1050

    IS - 2

    ER -