Data envelopment analysis

Actuarial science

Statistics

Accounting

Economics

Curriculum

Business

Corporate governance

Mathematics

Intellectual capital

Econometrics

Wilcoxon signed-rank test

Economic growth

Finance

Tobit model

Journal of Intellectual Capital

Purpose Using data on 51 firms traded in the Egyptian Exchange from 2014 to 2016, this paper aimed to assess the efficiency of corporate governance (CG) and intellectual capital (IC) practices and to explore their influence on the probability of a firm's financial distress. Design/methodology/approach The relative efficiency of CG and IC practices has been measured under the Malmquist data envelopment analysis model. A modified Z -score model was applied to assess firms' financial distress. Findings The Wilcoxon signed-rank test revealed almost insignificant evidence regarding the improvement of CG and IC efficiency over the study period. The efficiency score of CG practices had no impact on the likelihood of financial distress. However, the efficiency score of IC negatively affected the probability of financial distress. Research limitations/implications The integration of data envelopment analysis with Tobit regression was required for identifying the significant drivers of efficient CG and IC. Practical implications The findings shed light on the role of CG and IC in alleviating the degree of financial distress in Egypt as an emerging market, especially the need to raise firms' compliance with the Egyptian CG code from a voluntary to mandatory status. Originality/value This study, using Malmquist data envelopment analysis, is among the first attempts to assess the relative efficiency of CG and IC practices and their effects on financial distress.

Does the efficiency of corporate governance and intellectual capital affect a firm's financial distress? Evidence from Egypt