Accounting‐based variables as an early warning indicator of financial distress in crisis and non‐crisis periods

Financial integration in the Association of Southeast Asian Nations (ASEAN) region is a key focus ASEAN Economic Community. Whereas many studies on modelling corporate default, this paper identifies early warning indicators financial distress before using multiple discriminant analysis (MDA) models with sample listed and delisted companies region. The examines 720 10 different industries across six countries from 1997 to 2016. study constructs individual for each country as well an overall model entire region, both in-sample out-of-sample approaches. This could be useful integrated banking system. To ensure robustness, also separately predictive performance MDA economic crises: crisis (AFC) 2000, global (GFC) 2007 2009 their pre- post-crisis periods. We find that profitability ratios are best followed by liquidity leverage ratios. In addition, our findings reveal common can used predict countries. single performs reasonably predicting 1 year ahead. extended incorporate market-based indicator into models, distance default. However, inclusion does not significantly improve accuracy at firms