Open AccessLong-run performance of firms emerging from financial distress: Empirical evidence from Malaysia
Author(s) -
Abd Halim Ahmad,
Nur Adiana Hiau Abdullah,
Kamarun Nisham Taufil Mohd
Publication year - 2018
Publication title -
economics and business letters
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.197
H-Index - 4
ISSN - 2254-4380
DOI - 10.17811/ebl.7.1.2018.47-54
Subject(s) - financial distress , stock exchange , restructuring , business , emerging markets , stock market , sample (material) , stock (firearms) , distress , monetary economics , financial system , finance , economics , mechanical engineering , paleontology , ecology , chemistry , horse , chromatography , engineering , biology
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.