财务危机预警文献,仅供学习研究
higher risk of bankruptcy. This is an interesting finding unique to Taiwan economy. However, it is in general consistent with some U.S. literature that finds that soon-to-be bankrupt firms “cook” financial statement through earnings management to fool investors and auditors (e.g., Rosner, 2003).
Table 4-2 and 4-3 presents results for models with macroeconomic factors and electronic industry indicator. As expected, currency (M1b) supply change ratio and consumer price index change ratio have significantly negative association with the likelihood of bankruptcy. These confirm our conjecture that 1. as money supply increases, the cost of capital will go down and therefore reduce the risk of failure; 2. as consumer price index increases, the risk of failure decreases due to the prosperous economy and the increasing society consumption. Interest rate change ratio has significant positive coefficients, which is consistent with our expectation that increase in interest rate results in increase in cost of capital and therefore increases the risk of bankruptcy. Finally, the interaction term between interest rate and electronics industry dummy variable is observed to be significant negative. This confirms our expectation that due to lower debt ratio, electronic firms are less sensitive to the fluctuation in interest rate.
It is important to note that significant auditors’ opinions variables (i.e., going concern, and “other auditor”) remain their significance after controlling for
