Using a and a unique set of Italian non-listed Unlikely to Pay (UTP) positions, that consist in t... more Using a and a unique set of Italian non-listed Unlikely to Pay (UTP) positions, that consist in the phase that precedes the insolvency but where it is still possible for the company to succeed in restructuring, this paper aims to analyze the relationships between corporate governance characteristics and financial distress status. We compare the performance of corporate governance variables in predicting corporate defaults, using both the Logit and Random Forest models, which previous researchers have deemed to be the most efficient machine learning techniques. Our results show that the use of corporate governance variables – especially with regards to CEO renewal and stability in the composition of the board of directors – increases the accuracy of the Random Forest technique and influences the success of the turnaround process. This paper also confirms the Random Forest technique’s ability to significantly outperform the Logit model in terms of accuracy.
This is a PDF file of an article that has undergone enhancements after acceptance, such as the ad... more This is a PDF file of an article that has undergone enhancements after acceptance, such as the addition of a cover page and metadata, and formatting for readability, but it is not yet the definitive version of record. This version will undergo additional copyediting, typesetting and review before it is published in its final form, but we are providing this version to give early visibility of the article. Please note that, during the production process, errors may be discovered which could affect the content, and all legal disclaimers that apply to the journal pertain.
Cash flows analysis plays an increasingly important role in the study of business dynamics since ... more Cash flows analysis plays an increasingly important role in the study of business dynamics since cash flows play a key role in the company's economic performance, not only from a standpoint but also in predictive terms. The literature on the subject is poor in number and depth of research, the samples analyzed so far are limited and the statistical tools are weak. Retracing the steps of past research, we studied the relationships between cash flows of several management areas and economic performance, using a complete sample of Italian listed companies in the 2008-2017 period with more solid statistical tools compared to previous studies. The database used to collect all the balance sheet data necessary to conduct our research is Amadeus of the Bureau Van Dijk platform, which already shows reclassified and easily comparable financial statements. Correlation and multiple regression analysis were used to assess if our cash flow proxies could be strong predictors of future cash flo...
International Journal of Business and Globalisation, 2015
The Italian Law Decree of June 22, 2012, N. 83 (converted into law with amendments by Law of 7 Au... more The Italian Law Decree of June 22, 2012, N. 83 (converted into law with amendments by Law of 7 August 2012, N. 134), the so-called Development Decree (or Decreto Sviluppo in Italian), with the introduction of Article 32 intervened in order to overcome the difficulties of access to credit for businesses, including small and medium-sized enterprises (SMEs), increasing the possibility of direct access to the capital markets through finance bills that now will have a duration of 36 months. The objective is to align the financial opportunities of the national system with those offered by the most advanced industrial and financial systems in Europe, but also to counter the introduction of Basel III which will lead to a rationing of credit to the economy. In addition to expanding the possibilities of exploiting such a financial instrument that is not yet widespread, the so-called Development Decree allows for issuance in 'paperless' form to promote the circulation and exchange between operators, and changes the tax regime by extending the one applied to bonds which is more favourable.
International Journal of Critical Accounting, 2016
The manifold recent reform acts of bankruptcy law in Italy are more clearly oriented towards pres... more The manifold recent reform acts of bankruptcy law in Italy are more clearly oriented towards preserving the going concern of firms, besides granting the par condicio among creditors. Companies have broader opportunities to plan the restructuring, with the constraint of making it advantageous for creditors. In this context, the role of the independent attester is of prime and increasing importance to assure that the restructuring plan pursues creditors' and stakeholders' interests. This paper presents insights from both the authors' practical experiences and the review of the literature. It is addressed to managers, practitioners and scholars, interested in understanding turnarounds in the Italian context. The specificities of the attester's activity in analysing the data truthfulness and the feasibility of the recovery plan are deeply analysed. The article has a qualitative value and is based on a normative methodological approach, which links bankruptcy law with crisis management and auditing. The result is a systematic model of the attestation process.
PurposeThe purpose of this paper is to unpack the underlying mechanisms of entrepreneurs' pas... more PurposeThe purpose of this paper is to unpack the underlying mechanisms of entrepreneurs' passion, orientation and behavior by investigating the role of rational and nonrational cognitive elements. Building on dual process theory and sociointuitionism, a conceptual model is proposed in order to explore the relationship between entrepreneurial passion, entrepreneurial orientation (EO) and strategic entrepreneurship behavior (SEB). Specifically, entrepreneurs' linear thinking styles (System 2) and nonlinear thinking styles (System 1) are hypothesized as being significant moderators of such a relationship.Design/methodology/approachCovariance-based structural equation modeling (CB-SEM) is used to empirically validate the proposed conceptual model and test the moderating hypotheses on a sample of 300 entrepreneurs actively involved in European small and medium enterprises (SMEs).FindingsEntrepreneurial passion is shown to be a significant antecedent of EO, which, in turn, strong...
The aim of the current paper is to propose a bottom-up approach as a complement in risk return an... more The aim of the current paper is to propose a bottom-up approach as a complement in risk return analyses, particularly suitable for private firms and divisional evaluation. In those countries where private firms are more common than public firms, firm's economic fundamentals are more significant than market data. In this case, the use of a bottom up approach for the beta estimation is more suitable than a top down method, because it allows to consider both environmental and business drivers of risk and to study the systematic risk as a function of firm fundamentals. The paper is structured in three sections: in the first section, there is the literature review on the CAPM and the beta estimation; in the second section, there is the explanation of the model-a bottom up approach to unlevered risk-considering the role of the intrinsic business risk and of the operating leverage; finally, it is presented the analysis of the unlevered beta, according the bottom up model, both in stationary and the dynamic states.
The aim of this paper is to investigate if top executives’ turnover affects the performance of a ... more The aim of this paper is to investigate if top executives’ turnover affects the performance of a company and if it differently impacts the performances of a healthy and a restructured company. In order to investigate the impact of the renewal of both members of the board of directors and CEO impacts on company profitability, we performed a quantitative analysis based on a sample of 144 Italian companies using a logit model. The findings show that management changes influence the performance of a company. However, the results show a different impact for healthy and restructured companies. The renewal of the board of directors negatively affects the performances of a healthy company while influences positively the probability of a future increase in performances for restructured companies, suggesting useful implications for scholars and practitioners. This analysis confirms that the renewal of top executives can affect the probability of an increase of company performances, especially...
Using a and a unique set of Italian non-listed Unlikely to Pay (UTP) positions, that consist in t... more Using a and a unique set of Italian non-listed Unlikely to Pay (UTP) positions, that consist in the phase that precedes the insolvency but where it is still possible for the company to succeed in restructuring, this paper aims to analyze the relationships between corporate governance characteristics and financial distress status. We compare the performance of corporate governance variables in predicting corporate defaults, using both the Logit and Random Forest models, which previous researchers have deemed to be the most efficient machine learning techniques. Our results show that the use of corporate governance variables – especially with regards to CEO renewal and stability in the composition of the board of directors – increases the accuracy of the Random Forest technique and influences the success of the turnaround process. This paper also confirms the Random Forest technique’s ability to significantly outperform the Logit model in terms of accuracy.
This is a PDF file of an article that has undergone enhancements after acceptance, such as the ad... more This is a PDF file of an article that has undergone enhancements after acceptance, such as the addition of a cover page and metadata, and formatting for readability, but it is not yet the definitive version of record. This version will undergo additional copyediting, typesetting and review before it is published in its final form, but we are providing this version to give early visibility of the article. Please note that, during the production process, errors may be discovered which could affect the content, and all legal disclaimers that apply to the journal pertain.
Cash flows analysis plays an increasingly important role in the study of business dynamics since ... more Cash flows analysis plays an increasingly important role in the study of business dynamics since cash flows play a key role in the company's economic performance, not only from a standpoint but also in predictive terms. The literature on the subject is poor in number and depth of research, the samples analyzed so far are limited and the statistical tools are weak. Retracing the steps of past research, we studied the relationships between cash flows of several management areas and economic performance, using a complete sample of Italian listed companies in the 2008-2017 period with more solid statistical tools compared to previous studies. The database used to collect all the balance sheet data necessary to conduct our research is Amadeus of the Bureau Van Dijk platform, which already shows reclassified and easily comparable financial statements. Correlation and multiple regression analysis were used to assess if our cash flow proxies could be strong predictors of future cash flo...
International Journal of Business and Globalisation, 2015
The Italian Law Decree of June 22, 2012, N. 83 (converted into law with amendments by Law of 7 Au... more The Italian Law Decree of June 22, 2012, N. 83 (converted into law with amendments by Law of 7 August 2012, N. 134), the so-called Development Decree (or Decreto Sviluppo in Italian), with the introduction of Article 32 intervened in order to overcome the difficulties of access to credit for businesses, including small and medium-sized enterprises (SMEs), increasing the possibility of direct access to the capital markets through finance bills that now will have a duration of 36 months. The objective is to align the financial opportunities of the national system with those offered by the most advanced industrial and financial systems in Europe, but also to counter the introduction of Basel III which will lead to a rationing of credit to the economy. In addition to expanding the possibilities of exploiting such a financial instrument that is not yet widespread, the so-called Development Decree allows for issuance in 'paperless' form to promote the circulation and exchange between operators, and changes the tax regime by extending the one applied to bonds which is more favourable.
International Journal of Critical Accounting, 2016
The manifold recent reform acts of bankruptcy law in Italy are more clearly oriented towards pres... more The manifold recent reform acts of bankruptcy law in Italy are more clearly oriented towards preserving the going concern of firms, besides granting the par condicio among creditors. Companies have broader opportunities to plan the restructuring, with the constraint of making it advantageous for creditors. In this context, the role of the independent attester is of prime and increasing importance to assure that the restructuring plan pursues creditors' and stakeholders' interests. This paper presents insights from both the authors' practical experiences and the review of the literature. It is addressed to managers, practitioners and scholars, interested in understanding turnarounds in the Italian context. The specificities of the attester's activity in analysing the data truthfulness and the feasibility of the recovery plan are deeply analysed. The article has a qualitative value and is based on a normative methodological approach, which links bankruptcy law with crisis management and auditing. The result is a systematic model of the attestation process.
PurposeThe purpose of this paper is to unpack the underlying mechanisms of entrepreneurs' pas... more PurposeThe purpose of this paper is to unpack the underlying mechanisms of entrepreneurs' passion, orientation and behavior by investigating the role of rational and nonrational cognitive elements. Building on dual process theory and sociointuitionism, a conceptual model is proposed in order to explore the relationship between entrepreneurial passion, entrepreneurial orientation (EO) and strategic entrepreneurship behavior (SEB). Specifically, entrepreneurs' linear thinking styles (System 2) and nonlinear thinking styles (System 1) are hypothesized as being significant moderators of such a relationship.Design/methodology/approachCovariance-based structural equation modeling (CB-SEM) is used to empirically validate the proposed conceptual model and test the moderating hypotheses on a sample of 300 entrepreneurs actively involved in European small and medium enterprises (SMEs).FindingsEntrepreneurial passion is shown to be a significant antecedent of EO, which, in turn, strong...
The aim of the current paper is to propose a bottom-up approach as a complement in risk return an... more The aim of the current paper is to propose a bottom-up approach as a complement in risk return analyses, particularly suitable for private firms and divisional evaluation. In those countries where private firms are more common than public firms, firm's economic fundamentals are more significant than market data. In this case, the use of a bottom up approach for the beta estimation is more suitable than a top down method, because it allows to consider both environmental and business drivers of risk and to study the systematic risk as a function of firm fundamentals. The paper is structured in three sections: in the first section, there is the literature review on the CAPM and the beta estimation; in the second section, there is the explanation of the model-a bottom up approach to unlevered risk-considering the role of the intrinsic business risk and of the operating leverage; finally, it is presented the analysis of the unlevered beta, according the bottom up model, both in stationary and the dynamic states.
The aim of this paper is to investigate if top executives’ turnover affects the performance of a ... more The aim of this paper is to investigate if top executives’ turnover affects the performance of a company and if it differently impacts the performances of a healthy and a restructured company. In order to investigate the impact of the renewal of both members of the board of directors and CEO impacts on company profitability, we performed a quantitative analysis based on a sample of 144 Italian companies using a logit model. The findings show that management changes influence the performance of a company. However, the results show a different impact for healthy and restructured companies. The renewal of the board of directors negatively affects the performances of a healthy company while influences positively the probability of a future increase in performances for restructured companies, suggesting useful implications for scholars and practitioners. This analysis confirms that the renewal of top executives can affect the probability of an increase of company performances, especially...
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