Corporate Governance And Accuracy Level Of Financial Distress Prediction Models

Abstract

This investigation verifies the impact of corporate governance measure on the likelihood of financial distress on the Spanish Stock Exchange for the time period from 2007 to 2012. The authors applied an empirical study with panel data and conducted regression logistic models with the objective to calculate different measures of goodness of fit. The results of this study show that the prediction power of the financial distress models improves with the incorporation of some corporate governance measures.