Corporate governance and corporate failure: a survival analysis

Susan Parker (Susan Parker is an Assistant Professor, Santa Clara University, Santa Clara, California, USA.)
Gary F. Peters (Gary F. Peters is an Assistant Professor, University of Georgia, Athens, Georgia, USA.)
Howard F. Turetsky (Howard F. Turetsky is an Assistant Professor, San Jose State University, San Jose, California, USA.)

Corporate Governance

ISSN: 1472-0701

Publication date: 1 June 2002

Abstract

This study investigates the association of various corporate governance attributes and financial characteristics with the survival likelihood of distressed firms. To address the manner in which firms evolve over time, we employ survival analysis techniques by incorporating Cox Proportional Hazards regressions. We longitudinally track an ex ante sample of 176 financially distressed firms. The results suggest that firms that replaced their CEO with an outsider, were more than twice as likely to experience bankruptcy. Furthermore, larger levels of blockholder and insider ownership over the sample period are positively associated with the likelihood of firm survival.

Keywords

Citation

Parker, S., Peters, G.F. and Turetsky, H.F. (2002), "Corporate governance and corporate failure: a survival analysis", Corporate Governance, Vol. 2 No. 2, pp. 4-12. https://doi.org/10.1108/14720700210430298

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Publisher

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MCB UP Ltd

Copyright © 2002, MCB UP Limited

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