Default Risk Analysis In Micro, Small And Medium Enterprises: Does Debt Overhang Theory Occur?

Wahyudi, Imam (2014) Default Risk Analysis In Micro, Small And Medium Enterprises: Does Debt Overhang Theory Occur? Asian Academy of Management Journal of Accounting and Finance, 10 (1). pp. 1-37. ISSN 1823-4992

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Abstract

This paper intends to analyse the default risk in micro, small and medium enterprises (MSMEs) and its relation to new debt opportunities, debt overhang theory and growth intention. The results confirm that cash flow, capacity and leverage are the major determinants of firms’ default, while gross margin and efficiency measure are not significant predictors. By analysing the rating transition behaviour, we found that the further the rating migrates, the smaller the probability of transition and that the probability towards default is greater along with the decreased quality rating. By extending the analysis, we found that the debt overhang theory is not applied in relationships between banks and MSMEs.

Item Type:	Article
Subjects:	H Social Sciences > HD Industries. Land use. Labor > HD28-70 Management. Industrial Management
Divisions:	Penerbit Universiti Sains Malaysia (USM Press) > Asian Academy of Management Journal of Accounting and Finance
Depositing User:	Mr Firdaus Mohamad
Date Deposited:	05 Apr 2018 04:51
Last Modified:	05 Apr 2018 04:51
URI:	http://eprints.usm.my/id/eprint/39944

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