Purpose The purpose of this paper is to explain the multi-stage dynamic process of financial distress. An attempt is made to explore multiple adverse heterogeneous events of financial distress leading a firm closer to bankruptcy progressively. Design/methodology/approach Sample comprises 321 ongoing, 54 suspended and 91 delisted non-financial firms from Pakistan Stock Exchange. Financial distress is segregated into three stages, i.e. profit reduction, mild liquidity (ML) and severe liquidity (SL). Flow diagrams are used to explain the transition of healthy firms through proposed stages of financial distress. Findings Results showed that firms liquidated/winding-up by court documented SL problems and closed their operations well before the delisting year. It is found that healthy firms are more likely to face SL when faced ML problem at first stage. Distressed firms can recover to a healthy position at any stage, however after approaching to SL, recovery is less expected. Practical implications The proposed process will provide a foundation for future studies to develop more relevant, robust and accurate early warning system of corporate failure that will help stakeholders to respond potential crisis accordingly and timely. Originality/value Previously, most of the studies used the ex post definition of bankruptcy that is criticized due to the contextual application, sample bias and non-segregation by the degree of liquidity problems. The originality of the proposed ex ante model is its segregation into a three-stage process that can be generalized regardless of specific bankruptcy law.

Cities in South Asia are experiencing storm water drainage problems due to a combination of urban sprawl, structural, hydrological, socioeconomic and climatic factors. The frequency of short duration, high-intensity rainfall is expected to increase in the future due to climate change. Given the limited capacity of drainage systems in South Asian cities, urban flooding and waterlogging is expected to intensify. The problem gets worse when low-lying areas are filled up for infrastructure development due to unplanned urban growth, reducing permeable areas. Additionally, solid waste, when dumped in canals and open spaces, blocks urban drainage systems and worsens urban flooding and waterlogging. Using hydraulic models for two South Asian cities, Sylhet (in Bangladesh) and Bharatpur (in Nepal), we find that 22.3% of the land area in Sylhet and 12.7% in Bharatpur is under flooding risk, under the current scenario. The flood risk area can be reduced to 3.6% in Sylhet and 5.5% in Bharatpur with structural interventions in the drainage system. However, the area under flood risk could increase to 18.5% in Sylhet and 7.6% in Bharatpur in five years if the cities' solid waste is not managed properly, suggesting that the structural solution alone, without proper solid waste management, is almost ineffective in reducing the long-term flooding risk in these cities.

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Banks play a vital role in growth and development of an economy through prudent allocation of capital resources and their efficient utilization. This study evaluates efficiency of banking sector of Pakistan, including both conventional and Islamic banking, for the time period 2006-2010 by covering a total of 22 banks; Sample includes 16 Conventional and 6 Islamic banks. Efficiency is measured through frontier non parametric technique of data envelopment analysis based on intermediation approach. During the sample period the banking sector was not much efficient in the year 2009 and the estimated efficiency scores recommend that Islamic banks performed more efficiently during the study period as compared to Conventional banks.

PurposeThe purpose of this paper is to examine the impact of corporate governance (hereafter, CG) reforms on the risk disclosure quality in an emerging economy, namely Pakistan. The authors also investigate the impact of CG reforms on the relationship between CG practices and risk disclosure quality.Design/methodology/approachThe authors use a manual content analysis method to a sample of non-financial companies listed on the PSX-100 index for 2009–2015, to examine the impact of CG reforms on risk disclosure quality. The authors use pooled ordinary least squares and the system GMM estimations to test the research hypotheses.FindingsThe authors find that CG reforms have a positive impact on risk disclosure quality. The results indicate that certain CG practices such as CEO duality and board independence are associated with risk disclosure quality. Interestingly, the findings also highlight the effectiveness of CG reforms by showing that the revised code positively moderates the CG practices and risk disclosure relationship.Practical implicationsThe findings of the study have policy implications for regulatory bodies of emerging economies trying to strengthen the CG structures and to introduce risk disclosure regulations to cater the information need of stakeholders.Originality/valueThe authors provide new empirical evidence for the impact of CG reforms on risk disclosure quality using a unique setting of an emerging economy, namely Pakistan.