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Nonperforming assets in any banking system have stressed the economic health of nations. Resultantly, literature has given considerable impetus to predict failures and bankruptcy. Past studies have focused on the outcome of failures, while, there is a dearth of studies focusing on ongoing firms in bad shape. We plug this gap and attempt to identify underlying communication patterns for firms witnessing prolonged underperformance. Using text mining, we extract and analyze semantic, linguistic, emotional, and sentiment-based features in non-numeric communication channels of these poor-performing firms and their peers. These uncovered patterns highlight the use of vocabulary and tone of communication, in correspondence to their financial well-being. Furthermore, using such patterns, we deploy various Machine Learning algorithms to identify loser firm(s) way ahead in time. We observe promising accuracy over a time window of five years. Such early warning signals can be of critical importance to various stakeholders of a firm. Exploration of writing style-related features for any firm would help its investors, lending agencies to assess the likelihood of future underperformance. Firm management can use them to take suitable precautionary measures and preempt the future possibility of distress. While investors and lenders can be benefitted from this incremental information to identify the likelihood of future failures.

This chapter aims at examining financial distress issue by designing a comprehensive model to explain and predict financial distress in Egypt. This comprehensive model incorporates accounting ratios, market-based ratios and macroeconomic ratios. The sample of the existing research includes all the listed firms in two main sectors: basic resources and chemicals. Using logistic regression model, the results showed that adding market ratios and macroeconomic ratios enhances the predictability of the model and accounting information are not sufficient to explain financial distress.

Purpose – The aim of this article is to examine the effects of ownership concentration and board characteristics on the performance of firms domiciled in Jordan.

Design/methodology/approach – The article employs two-stage least square (2SLS) regressions on a sample of 103 firms listed on the Amman Stock Exchange for financial years 2002–2005.

Findings – The empirical results suggest that ownership concentration, multiple directorships and board size are each positive and significant in determining firm performance. Although this result contradicts the findings of some developed country studies, they are consistent with recent emerging market studies.

Implications – The findings of this article echo some of prior researchers’ contention that reforms in corporate governance principles in emerging markets should go beyond adopting the best practice in developed markets and take into account the country- and firm-specific characteristics.

Originality/value – This article exploits a unique dataset of ownership and board characteristics in an emerging market, as well as provides additional evidence on the relation between corporate governance and firm performance. Results of this research provide useful information for policymakers and legislators to understand the environment for corporate control in developing countries.

Today, firm performance must be measured not only on traditional metrics but also on those that reflect the changing imperatives and new metric knowledge. Thus, the focus of managers, investors, and researchers is shifting from rubrics like sales and profitability to growth as a more appropriate measure of firm performance. We aim to highlight the effects that growth of a firm can have on the level of its systematic risk. Using a sample of 203 firms across nine industries taken from the Indian manufacturing sector for a period of 17 years (1998–2014), we develop and test a panel vector autoregressive (VAR) model to analyze the causal relationship between growth aspects and systematic risk of firms. Results depict that a growth option available to firms increase their level of systematic risk and the risk decreases when firms start chasing this growth by increasing their assets in place. Sustainable growth rate, which depicts the growth potential of firms, plays an important role in reducing the level of systematic risk. The findings of this chapter are relevant to managers who think that growth is always beneficial.