IDEAS home Printed from https://ideas.repec.org/a/eme/ijmfpp/ijmf-12-2017-0283.html
   My bibliography  Save this article

Board structure and financial distress in Brazilian firms

Author

Listed:
  • Guilherme Freitas Cardoso
  • Fernanda Maciel Peixoto
  • Flavio Barboza

Abstract

Purpose - The purpose of this paper is to investigate what board characteristics affect companies in periods of financial distress (FD) among non-financial Brazilian firms and examine which model best fits to predict FD. Design/methodology/approach - The sample comprises data from 2010 to 2016 of the non-financial Brazilian firms listed on the Brazilian Stock Exchange. To measure this relationship, a conditional logistic regression is performed. Findings - A U-shaped relationship between the size of the board of directors (BD) and FD is found in all models, indicating an optimal number of six members in the BD during the period of FD. However, board characteristics (related to composition and directors’ independence) are insufficient to align the shareholders’ interests and unsuitable for avoiding or even reducing FD in firms when other factors are neglected. Furthermore, the results reveal what variables provide the best-fitting models to predict FD. Originality/value - To the best of the authors’ knowledge, this is the first study that investigates how the composition of the BD affects the FD likelihood in the Brazilian context. The findings are potentially of interest to researchers and practitioners since this paper contributes to the growing literature on the influence of corporate governance mechanisms in periods of FD and the understanding of its prediction models.

Suggested Citation

  • Guilherme Freitas Cardoso & Fernanda Maciel Peixoto & Flavio Barboza, 2019. "Board structure and financial distress in Brazilian firms," International Journal of Managerial Finance, Emerald Group Publishing Limited, vol. 15(5), pages 813-828, May.
    • Handle: RePEc:eme:ijmfpp:ijmf-12-2017-0283
    DOI: 10.1108/IJMF-12-2017-0283
    as

    Download full text from publisher

    File URL: https://www.emerald.com/insight/content/doi/10.1108/IJMF-12-2017-0283/full/html?utm_source=repec&utm_medium=feed&utm_campaign=repec
    Download Restriction: Access to full text is restricted to subscribers
    File URL: https://www.emerald.com/insight/content/doi/10.1108/IJMF-12-2017-0283/full/pdf?utm_source=repec&utm_medium=feed&utm_campaign=repec
    Download Restriction: Access to full text is restricted to subscribers
    File URL: https://libkey.io/10.1108/IJMF-12-2017-0283?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Bekirova, Olga & Zubarev, Andrey, 2022. "Эконометрический Анализ Факторов Банкротств Российских Компаний В Обрабатывающем Секторе [Econometric Analysis of Bankruptcy Factors for Russian Companies in the Manufacturing Industry]," MPRA Paper 114969, University Library of Munich, Germany.
    2. Kirpishchikov, D., 2024. "Board of directors' social capital as factor of companies' resilience to exogenous shocks," Journal of the New Economic Association, New Economic Association, vol. 62(1), pages 50-74.
    3. Umair Bin Yousaf & Khalil Jebran & Irfan Ullah, 2024. "Corporate governance and financial distress: A review of the theoretical and empirical literature," International Journal of Finance & Economics, John Wiley & Sons, Ltd., vol. 29(2), pages 1627-1679, April.
    4. Balagobei, S, 2022. "Corporate Governance and Financial Distress: Empirical Evidence from listed Consumer Services Firms in Sri Lanka ," GATR Journals afr211, Global Academy of Training and Research (GATR) Enterprise.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eme:ijmfpp:ijmf-12-2017-0283. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Emerald Support (email available below). General contact details of provider: .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.