A study of the relationship between corporate governance features and bankruptcy by using survival analysis

The present paper examines the effect of the internal mechanisms of corporate governance (CG) on the firm’s bankruptcy. For this purpose, a sample of 76 firms enlisted in Tehran Stock Exchange (TSE) during a 9-year period (2001-2009) was selected and examined. Cox regression was used to test the hypotheses. The criteria used for the CG system mechanisms include: board size, CEO replacement and CEO dual position. Control variables include: firm size, profitability, interest coverage ratio, liquidity, financial risk and operating risk. The results indicate that there is a significant relationship between CEO replacement and bankruptcy but no significant association was observed between board size and CEO dual position with the bankruptcy