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Article
Publication date: 4 September 2007

Kaylene Zaretzky and J. Kenton Zumwalt

Earlier research found that firms with the highest distress risk have low book‐to‐market (B/M) ratios and low returns. This paper aims to examine the robustness of those's…

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Abstract

Purpose

Earlier research found that firms with the highest distress risk have low book‐to‐market (B/M) ratios and low returns. This paper aims to examine the robustness of those's results and provide further evidence that high distress‐risk firms do not enjoy the same high returns earned by high B/M firms and that distress risk is unlikely to explain the Fama and French high‐minus‐low (HML) B/M factor.

Design/methodology/approach

A distress‐risk measure, distressed‐minus‐solvent (DMS), is calculated and a range of zero investment distress‐risk trading strategies is investigated. Value‐ and equal‐weighted portfolios are examined both with negative book‐equity firms and without. These most distressed firms have low or negative B/M values and would either not be included in the Fama and French sample or included in the low B/M portfolio.

Findings

The paper finds that the DMS factor is negative and significant, and none of the zero investment strategies earns significantly positive returns.

Research limitations/implications

The findings suggest that exposure to distress risk does not earns investors a positive risk premium. It appears that over the period examined, market inefficiencies drive the market value and returns of high distress‐risk firms.

Originality/value

The distress‐risk premium is shown to be negative and, therefore, cannot be driven by bankruptcy risk alone. The negative premium is not consistent with a financial distress explanation for the Fama and French HML factor.

Details

Managerial Finance, vol. 33 no. 10
Type: Research Article
ISSN: 0307-4358

Keywords

Article
Publication date: 3 May 2013

Eileen O'Donnell, Paul D'Alton, Conor O'Malley, Finola Gill and Áine Canny

The psycho-oncology and social work services recognised that a cancer diagnosis and treatment can result in considerable emotional consequences for patients, yet the…

1117

Abstract

Purpose

The psycho-oncology and social work services recognised that a cancer diagnosis and treatment can result in considerable emotional consequences for patients, yet the referral rate to both services was extremely low. Only very visibly distressed patients were being referred to the service. The “Distress Thermometer” (DT), a distress screening tool, was introduced as a pilot project with day care and inpatient oncology patients of St Vincent ' s University Hospital, Dublin, in an effort to improve the identification, management and treatment of psychological distress in oncology patients. The purpose of this paper is to evaluate the effectiveness of this new intervention.

Design/methodology/approach

The Psycho-oncology service in conjunction with the Medical Social Work Department and Nursing Management at St Vincent ' s University Hospital, Dublin, initiated a Distress Education Management and Training Programme (DEMP). The initiative involved providing a training programme for oncology nursing staff and the introduction of a distress-screening tool for patients. In 1998, the DT was developed and validated for evaluation of distress (and depression) in cancer. It was adopted into recommendations made by the US National Comprehensive Cancer Network. The DT is a simple, self-report, pencil and paper measure consisting of a line with a 0-10 scale anchored at the zero point with “No distress” and at scale point ten with “Extreme distress”. Patients are given the instruction, “How distressed have you been during the past week on a scale of 0-10”? Patients indicated their level of distress with a mark on the scale. Patients scoring 4 or above were regarded as requiring intervention. The DT includes a problem checklist. The patient is asked to identify those problems from the checklist which are contributing to their score. The use of the DT was evaluated through interviews with patients and professionals.

Findings

Patients who scored four or above (38 per cent of patients), were seen by the Oncology Social Worker for psychosocial assessment and mental health triage. Patients who scored above a certain level (usually above 12/20) in the clinical range on the Hospital Anxiety and Depression scale (3 per cent) were referred to Psycho-oncology. That 38 per cent of oncology patients required intervention from a specialist service accurately reflects international findings on the rate of distress among cancer patients.

Practical implications

Assessment of cancer patients ' distress levels in a structured and planned manner with a Distress Thermometer, as recommended by best international practice, works very effectively and should be considered for all cancer out-patients This will have implications in terms of staff that will be required to manage such a service.

Originality/value

This was the first time that this internationally recognised tool was used to such an extent and to positive effect in an Irish context.

Details

International Journal of Health Care Quality Assurance, vol. 26 no. 4
Type: Research Article
ISSN: 0952-6862

Keywords

Article
Publication date: 10 October 2022

Ali Meftah Gerged, Shaojie Yao and Khaldoon Albitar

This study aims to investigate the possible implications of compliance with corporate governance (CG) provisions, including board composition and ownership structures, on…

Abstract

Purpose

This study aims to investigate the possible implications of compliance with corporate governance (CG) provisions, including board composition and ownership structures, on the firm’s likelihood of falling into financial distress.

Design/methodology/approach

The study applies a random-effects logistic regression model as a baseline analysis using a sample of 110 FTSE 350 manufacturing companies from 2014 to 2019. This technique is supported by conducting a two-stage Heckman regression model to overcome the potential existence of endogeneity problems.

Findings

The empirical evidence suggests that board composition and ownership structure are heterogeneously associated with financial distress probabilities in that they might have either reduced or increased the financial distress of the sampled firms. Specifically, board independence, board gender diversity, audit committee independence and institutional ownership negatively influence the likelihood of financial distress. In contrast, and consistent with the expectations, ownership concentration is positively attributed to financial distress, while the board size, audit committee size and managerial ownership have insignificant impacts on financial distress.

Originality/value

The study extends the existing body of knowledge by examining the collective effect of board characteristics and ownership structures on firms’ financial distress likelihood among a sample of manufacturing firms within the FTSE 350 index post the 2008 global financial crisis and following the recent CG reforms in the UK during the study period from 2014 to 2019.

Details

Corporate Governance: The International Journal of Business in Society, vol. ahead-of-print no. ahead-of-print
Type: Research Article
ISSN: 1472-0701

Keywords

Article
Publication date: 6 October 2022

Filipe Sardo, Zélia Serrasqueiro, Elisabete Vieira and Manuel Rocha Armada

This study seeks to analyse if the adjustment towards the target short-term debt ratio of small and medium-sized firms (SMEs) is related to financial distress risk.

Abstract

Purpose

This study seeks to analyse if the adjustment towards the target short-term debt ratio of small and medium-sized firms (SMEs) is related to financial distress risk.

Design/methodology/approach

Data obtained for a sample of Portuguese manufacturing SMEs from 2010 to 2017 were analysed using the system-generalised method of moments (GMM-sys). Using the modified Z-Altman score, the authors classify SMEs according to their exposure to financial distress risk.

Findings

Manufacturing SMEs exposed to a high risk of financial distress rebalance their short-term debt ratio quicker. However, regardless of the financial distress risk level, SMEs distant from the target short-term debt ratio adjust more slowly, suggesting that transaction costs are greater than financial distress costs.

Practical implications

Policymakers should promote the access to external sources of finance with low transaction costs for SMEs, exposed to low levels of financial distress risk, to rebalance their short-term debt ratios quicker. Distressed SMEs far from their target short-term debt ratios, but with capacity to rebalance, need government programmes to access finance with low transaction costs to rebalance their short-term debt ratios.

Originality/value

This paper contributes to deepening our understanding of how SMEs, facing financial risk, rebalance their short-term debt ratios. SMEs, facing high financial distress risk, adjust towards their target short-term debt ratios more rapidly. However, SMEs, distant from the target short-term debt ratio face higher transaction costs than financial distress costs. These firms adjust towards their target short-term debt ratios more slowly, which may aggravate the refinancing risk and, ultimately, announce bankruptcy.

Details

The Journal of Risk Finance, vol. 23 no. 5
Type: Research Article
ISSN: 1526-5943

Keywords

Article
Publication date: 16 August 2022

Arooba Chaudhary and Talat Islam

Healthcare workers are considered to be the most vulnerable to face mental health. Therefore, this paper aims to examine how negative leadership (despotic leadership…

Abstract

Purpose

Healthcare workers are considered to be the most vulnerable to face mental health. Therefore, this paper aims to examine how negative leadership (despotic leadership) affects employees' psychological distress. Specifically, the authors investigated bullying behavior as mediating mechanism and hostile attribution bias as boundary condition that trigger psychological distress.

Design/methodology/approach

The authors collected data from 252 nurses and their immediate supervisors (as a coping strategy for common method bias) through “Google Forms” from various public and private hospitals.

Findings

The authors applied structural equation modeling and noted that despotic leadership positively affects employees' psychological distress through bullying behavior. In addition, hostile attribution bias is identified as an important factor in amplifying the effect of bullying behavior on psychological distress.

Research limitations/implications

The authors collected data from high-power distance culture where negative leadership is more prevalent as compared to low-power distance culture. Their findings suggest management to discourage self-centered leaders (despotic) and employees with negative personality traits (hostile attribution bias) as these affect their mental health.

Originality/value

Drawing upon conservation of resources theory, this study is the first of its kind that has investigated how and when despotic leadership affects employees' psychological distress. In addition, the authors also highlighted the importance of negative personality traits (hostile attribution bias) that can amplify the association between bullying behavior and psychological distress.

Details

Kybernetes, vol. ahead-of-print no. ahead-of-print
Type: Research Article
ISSN: 0368-492X

Keywords

Book part
Publication date: 29 September 2016

Mick Cunningham and JaneLee Waldock

A small number of studies have suggested that parental divorce may manifest during adulthood as low-level emotional distress characterized by painful feelings such as…

Abstract

Purpose

A small number of studies have suggested that parental divorce may manifest during adulthood as low-level emotional distress characterized by painful feelings such as sadness or self-blame. In light of the paucity of existing research on distress, the current study was designed to assess the presence of distress among a sample of young adults with divorced parents and to ascertain whether painful feelings accurately describe the primary ongoing consequences of parental divorce.

Methodology/approach

Semi-structured interviews with a sample of university students were conducted to investigate the concept of distress after parental divorce. Interview guides were designed to elicit responses about ways that parental divorce continues to influence the lives of young adults.

Findings

The study identified a set of ongoing stressors that do not overlap substantially with previous measures of post-divorce distress and that are often rooted in logistical difficulties. Three specific sources of distress are discussed: family coordination difficulties, struggles balancing the politics of parental expectations about time with their children, and perceptions of family fragmentation. These sources of distress frequently originate in the physical separation of parents’ households. Interviewees reported spending extra time and energy arranging family visits. Their choices about visiting parents frequently led to both feelings of guilt about the allocation of family time and a reduced sense of family cohesion. Ongoing logistical difficulties were much more commonly cited by young adults than painful feelings.

Originality/value

This qualitative investigation of distress suggests a significant re-orientation toward our understanding of the consequences of parental divorce is needed.

Details

Divorce, Separation, and Remarriage: The Transformation of Family
Type: Book
ISBN: 978-1-78635-229-3

Keywords

Book part
Publication date: 17 December 2003

Debra L Nelson and Bret L Simmons

This chapter proposes a more holistic approach to understanding work stress by incorporating eustress, the positive response to stressors. We begin by casting the study of…

Abstract

This chapter proposes a more holistic approach to understanding work stress by incorporating eustress, the positive response to stressors. We begin by casting the study of eustress as part of a contemporary movement in both psychology and organizational behavior that accentuates the positive aspects of human adaptation and functioning. We discuss the development of the concept of eustress, and provide extensive evidence, both psychological and physiological, for the purpose of developing an explicit construct definition. An exploratory study of hospital nurses is presented as an initial test of our holistic model of stress. We conclude by asserting that there must exist a complement to coping with distress such that rather than preventing or resolving the negative side of stress, individuals savor the positive side of stress.

Details

Emotional and Physiological Processes and Positive Intervention Strategies
Type: Book
ISBN: 978-1-84950-238-2

Book part
Publication date: 7 November 2018

Kevin Stainback, Kendra Jason and Charles Walter

Organizational approaches to racial inequality have provided contextual insight into a host of traditional stratification outcomes (e.g., hiring, earnings, authority)…

Abstract

Organizational approaches to racial inequality have provided contextual insight into a host of traditional stratification outcomes (e.g., hiring, earnings, authority). This chapter extends the organizational approach by drawing on the health-stress framework to explore how organizational context affects experiential and health-related outcomes – discrimination, social support, and psychological distress. Drawing on a sample of Black workers in the United States, we examine the relationship between workplace racial composition and psychological distress, as well as two potential mediators – racial discrimination and workplace social support. Our findings reveal that psychological distress is similar for Black workers in token (<25% Black coworkers), tilted other race (25–49.99% Black coworkers), and tilted same race (50–74.99% Black coworkers) job contexts. Workers in Black-dominated jobs (>75% Black coworkers), however, experience significantly less psychological distress than other compositional thresholds, net of individual, job, and workplace characteristics. This relationship is not explained by either racial discrimination experiences or supervisor and coworker social support. This finding suggests that researchers need to theorize and examine other protective factors stemming from coworker racial similarity.

Book part
Publication date: 1 March 2021

Suzaida Bakar and Bany Ariffin Amin Noordin

Dynamic predictions of financial distress of the firms have received less attention in finance literature rather than static prediction, specifically in Malaysia. This…

Abstract

Dynamic predictions of financial distress of the firms have received less attention in finance literature rather than static prediction, specifically in Malaysia. This study, therefore, investigates dynamic symptoms of the financial distress event a few years before it happened to the firms by using neural network method. Cox Proportional Hazard regression models are used to estimate the survival probabilities of Malaysian PN17 and GN3 listed firms. Forecast accuracy is evaluated using receiver operating characteristics curve. From the findings, it shown that the independent directors’ ownership has negative association with the financial distress likelihood. In addition, this study modeled a mix of corporate financial distress predictors for Malaysian firms. The combination of financial and non-financial ratios which pressure-sensitive institutional ownership, independent director ownership, and Earnings Before Interest and Taxes to Total Asset shown a negative relationship with financial distress likelihood specifically one year before the firms being listed in PN 17 and GN 3 status. However, Retained Earnings to Total Asset, Interest Coverage, and Market Value of Debt have positive relationship with firm financial distress likelihood. These research findings also contribute to the policy implications to the Securities Commission and specifically to Bursa Malaysia. Furthermore, one of the initial goals in introducing the PN17 and GN3 status is to alleviate the information asymmetry between distressed firms, the regulators, and investors. Therefore, the regulator would be able to monitor effectively distressed firms, and investors can protect from imprudent investment.

Details

Recent Developments in Asian Economics International Symposia in Economic Theory and Econometrics
Type: Book
ISBN: 978-1-83867-359-8

Keywords

Book part
Publication date: 1 January 2012

Christian Hofer

Few industries may be better suited to study the effects of financial distress on managerial decision making than the airline industry. Economic recessions, natural…

Abstract

Few industries may be better suited to study the effects of financial distress on managerial decision making than the airline industry. Economic recessions, natural catastrophes, and terrorist attacks are just some of the factors that frequently take a particularly heavy toll on the airline industry. Thus, coping with and overcoming financial distress is a critical aspect of airline management.

Details

Pricing Behavior and Non-Price Characteristics in the Airline Industry
Type: Book
ISBN: 978-1-78052-469-6

1 – 10 of over 21000