Accounting Conservatism, Threat of takeover, Corporate Governance and Default risk; A Comparative Analysis of Developing and Developed Economies (Pakistan & US)

Authors

  • Fawad Ali Khan PHD Scholar Faculty of Management Science International Islamic University Islamabad
  • Syed Zulfiqar Ali Shah Professor Dean Faculty of Management Science International Islamic University Islamabad

Abstract

The aim of this paper is to explore the impact of accounting conservatism, takeover threat and corporate governance on the risk of default. The study analyzed data from 400 non-financial companies listed on the Stock Exchanges, including 200 firms from Pakistan and 200 from the United States of America. The data spanned a period of 13 years, from 2009 to 2021, and various statistical analysis methods were used to investigate the connections between the variables. The study employed an agency theory to investigate the relationships. Results of the study showed that both in Pakistan and the USA, accounting conservatism, takeover threat, and corporate governance had a significant negative relationship with default risk. These findings have important implications for stakeholders such as investors, business analysts, managers, and researchers. By considering these factors, stakeholders can better assess firms' default risk and develop investment strategies that align with their objectives.

Keywords: Accounting Conservatism, Takeover Threat, Default Risk

Downloads

Published

2024-01-25

How to Cite

Fawad Ali Khan, & Syed Zulfiqar Ali Shah. (2024). Accounting Conservatism, Threat of takeover, Corporate Governance and Default risk; A Comparative Analysis of Developing and Developed Economies (Pakistan & US). Journal of Business and Management Research, 3(1), 115–162. Retrieved from http://jbmr.com.pk/index.php/Journal/article/view/101