Long-run performance of firms emerging from financial distress: Empirical evidence from Malaysia

We examine the long-run performance of firms emerging from financial distress in Malaysia. The sample consists of 114 companies listed on the Bursa Malaysia stock exchange that emerged from a financially distressed classification between 2001 and 2014. We investigate whether post-distressed performa...

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Bibliographic Details
Published in:Economics and business letters 2018-01, Vol.7 (1), p.47-54
Main Authors: Ahmad, Abd Halim, Abdullah, Nur Adiana Hiau, Taufil Mohd, Kamarun Nisham
Format: Article
Language:English
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Summary:We examine the long-run performance of firms emerging from financial distress in Malaysia. The sample consists of 114 companies listed on the Bursa Malaysia stock exchange that emerged from a financially distressed classification between 2001 and 2014. We investigate whether post-distressed performance is similar to the performance of firms of equivalent size and book-to-market ratio and the market indices. The results suggest that firms emerging from financial distress in Malaysia underperform when compared to the performance of firms similar in size and book-to-market ratio and the market indices. This suggests that the post-restructuring performance of firms on the Bursa Malaysia stock exchange that have emerged from financial distress does not improve.
ISSN:2254-4380
2254-4380
DOI:10.17811/ebl.7.1.2018.47-54