Investigating and Comparing the Features of Corporate governance and Financial Variables Shared by Bankrupt Companies and the Companies surviving the Financial Crisis in Tehran Stock Exchange

Maryam Javedan, Zahra Lashgari


 In this study, the impact of financial variables and corporate governance on bankruptcy, recovery, and financial crisis have been examined. For this purpose, a panel logistic regression model was used and to predict the risk of financial crisis, bankruptcy, and recovery, Cox regression was used. The population consists of the companies listed in Tehran Stock Exchange.The test was done on three groups of companies: bankrupt companies, companies with financial crisis, and retrieved companies out of the 120 companies listed on the Tehran Stock Exchange. The first group of companies are those whose losses according to article 141 of the Commercial Code are half of their capital. These companies are declared bankrupt and are excluded from the exchange and the OTC. The second category is those companies which in accordance with Article 141 lose money but they have not yet declared bankrupt and have not been out of stock. The third category is companies that have returned to the market and have improved their financial situation. Financial factors investigated were liquidity ratios, profitability, capital structure, and corporate governance. To examine the effects of corporate governance, the ratio of independent directors and institutional shareholders have been used.The results indicate that the proportion of cash, the proportion of market value to office value,  and the size of the company have no significant effect on the risk of bankruptcy, financial crisis, and recovery. However, the effect of institutional shareholders, independent directors, profitability, and current assets is significant on the possibility of bankruptcy, financial crisis, and recovery. Capital Ratios affect the risk of financial crisis, but they have no significant impact on the likelihood of bankruptcy and recovery. Financial leverage affects the possibility of recovery and bankruptcy but it has no effect on the risk of financial crisis.


bankruptcy, financial crisis, recovery, survival analysis model

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