{"title":"Prediction of corporate financial distress based on corporate social responsibility: New evidence from DANP, VWP and MEOWA weights methodologies","authors":"Hui Li, Ting Sun, Jinquan Zhang","doi":"10.1111/acfi.13282","DOIUrl":null,"url":null,"abstract":"This study investigates the determinants of financial distress from the corporate social responsibility (CSR) perspective and examines how poor CSR performance leads to financial distress in enterprises. Based on theoretical analysis, we select predictive indicators and construct an early warning indicator system for predicting financial distress from a CSR standpoint. Additionally, we develop a novel dynamic financial distress prediction (FDP) model using decision‐making trial and evaluation laboratory (DEMATEL)‐based analytic network process (DANP), variable weights with penalty (VWP), and maximal entropy ordered weighted average (MEOWA) weight methods to assess corporate financial status. Furthermore, to evaluate the accuracy of our model, we apply it to Chinese listed companies for empirical analysis using a sample of 1142 listed Chinese companies spanning 2011–2023. The results demonstrate that our developed FDP model exhibits higher predictive accuracy compared to previous models, suggesting that poor CSR practices can contribute to corporate financial distress while significantly enhancing FDP performance.","PeriodicalId":335953,"journal":{"name":"Accounting & Finance","volume":"52 2","pages":""},"PeriodicalIF":0.0000,"publicationDate":"2024-06-13","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":"0","resultStr":null,"platform":"Semanticscholar","paperid":null,"PeriodicalName":"Accounting & Finance","FirstCategoryId":"1085","ListUrlMain":"https://doi.org/10.1111/acfi.13282","RegionNum":0,"RegionCategory":null,"ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":null,"EPubDate":"","PubModel":"","JCR":"","JCRName":"","Score":null,"Total":0}
引用次数: 0
Abstract
This study investigates the determinants of financial distress from the corporate social responsibility (CSR) perspective and examines how poor CSR performance leads to financial distress in enterprises. Based on theoretical analysis, we select predictive indicators and construct an early warning indicator system for predicting financial distress from a CSR standpoint. Additionally, we develop a novel dynamic financial distress prediction (FDP) model using decision‐making trial and evaluation laboratory (DEMATEL)‐based analytic network process (DANP), variable weights with penalty (VWP), and maximal entropy ordered weighted average (MEOWA) weight methods to assess corporate financial status. Furthermore, to evaluate the accuracy of our model, we apply it to Chinese listed companies for empirical analysis using a sample of 1142 listed Chinese companies spanning 2011–2023. The results demonstrate that our developed FDP model exhibits higher predictive accuracy compared to previous models, suggesting that poor CSR practices can contribute to corporate financial distress while significantly enhancing FDP performance.
本研究从企业社会责任(CSR)的角度研究了财务困境的决定因素,并探讨了企业社会责任表现不佳是如何导致企业财务困境的。在理论分析的基础上,我们选择了预测指标,并构建了从企业社会责任角度预测财务困境的预警指标体系。此外,我们还利用基于决策试验和评估实验室(DEMATEL)的分析网络过程(DANP)、带惩罚的可变权重(VWP)和最大熵有序加权平均(MEOWA)权重法,建立了一个新颖的动态财务困境预测(FDP)模型,用于评估企业财务状况。此外,为了评估模型的准确性,我们将其应用于中国上市公司,以 2011-2023 年间 1142 家中国上市公司为样本进行了实证分析。结果表明,与之前的模型相比,我们开发的 FDP 模型表现出更高的预测准确性,这表明不良的企业社会责任实践会导致企业陷入财务困境,同时显著提高 FDP 业绩。