Leading Through Cash Flow Volatility: How CEO Integrity Mitigates Insolvency Risk
References
- Achbah, R. (2023). CEO advice seeking and the failure escape: The role of the CEO entourage in corporate restructuring. Academy of Management Proceedings.
- Al Haddad, O., & Juhmani, O. I. (2020). Corporate governance and the insolvency risk: Evidence from Bahrain. 2020 International Conference on Decision Aid Sciences and Application (DASA).
- Ali, S., Hussain, N., & Iqbal, J. (2021). Corporate governance and the insolvency risk of financial institutions. The North American Journal of Economics and Finance, 55, Article 101311.
- Altman, E. (2005). An emerging market credit scoring system for corporate bonds. Emerging Markets Review, 6(4), 311–323.
- Ang, J. S., Cole, R. A., & Lin, J. W. (2000). Agency costs and ownership structure. The Journal of Finance, 55(1), 81–106.
- Black, S. (2015). CEOs and top leaders: Solutions to solve ethical dilemmas and decision making. 5th International Conference on Engaged Management Scholarship: Baltimore, Maryland.
- Brown, M. E., & Treviño, L. K. (2006). Ethical leadership: A review and future directions. The Leadership Quarterly, 17(6), 595–616.
- Brown, M. E., Treviño, L. K., & Harrison, D. A. (2005). Ethical leadership: A social learning perspective for construct development and testing. Organizational Behavior and Human Decision Processes, 97(2), 117–134.
- Chay, J.-B., & Suh, J. (2009). Payout policy and cash-flow uncertainty. Journal of Financial Economics, 93(1), 88–107.
- Cleary, S. (2006). International corporate investment and the relationships between financial constraint measures. Journal of Banking & Finance, 30(5), 1559–1580.
- Dikolli, S. S., Mayew, W. J., & Steffen, T. D. (2012). Honoring one’s word: CEO integrity and accruals quality. SSRN.
- Douglas, D., Ulupui, I. G. K. A., & Nasution, H. (2020). The influence of operating cycle, cash flow volatility, and audit fee on earnings persistence (the Indonesian cases). Sriwijaya International Journal of Dynamic Economics and Business, 4(1), 1–20.
- Eisenbeiss, S. A., Van Knippenberg, D., & Fahrbach, C. M. (2015). Doing well by doing good? Analyzing the relationship between CEO ethical leadership and firm performance. Journal of Business Ethics, 128, 635–651.
- Erhard, W., Jensen, M. C., & Zaffron, S. (2009). Integrity: A positive model that incorporates the normative phenomena of morality, ethics, and legality. SSRN. https://doi.org/10.2139/ssrn.920625
- Faghekarimi, S., Ohadi, F., Nikomram, H., & Royaei, R. (2022). Evaluating the effect of managers’ narcissism on bankruptcy risk among companies listed on the Tehran Stock Exchange. Studia Universitatis Vasile Goldiș Arad, Seria Științe Economice, 32(2), 65–83.
- Fazzari, S. M., & Petersen, B. (1990). Investment smoothing with working capital: New evidence on the impact of financial constraints.
- Giarto, R. V. D., & Fachrurrozie, F. (2020). The effect of leverage, sales growth, cash flow on financial distress with corporate governance as a moderating variable. Accounting Analysis Journal, 9(1), 15–21.
- Gleißner, W. (2020). Valuation beyond CAPM: How to calculate with earnings risk and insolvency. SSRN. https://ssrn.com/abstract=3592371
- Goel, A. M., & Thakor, A. V. (2003). Why do firms smooth earnings? The Journal of Business, 76(1), 151–192.
- Graham, J. R., & Harvey, C. R. (2001). The theory and practice of corporate finance: Evidence from the field. Journal of Financial Economics, 60(2–3), 187–243.
- Hamid, Z., & Siddiqui, M. A. (2023). Firm-specific and macroeconomic determinants of probability of default: A case of Pakistani non-financial sector. International Journal of Sustainable Development and Planning, 18(2).
- Hussain, H., Ahmed, M. W., Mirza, H. H., Irshad, H., & Hussain, R. Y. (2025). Income diversity, ownership concentration, and credit risk in commercial banks: Does bank growth matter? International Journal of Financial Engineering, Article 2550007.
- Hussain, H., Rus, R. M., & Al-Jaifi, H. A. (2019). Direct agency cost of equity, cash flow volatility and dividend pay-out: Evidence from Pakistan. Pertanika Journal of Social Sciences & Humanities, 27(1).
- Hussain, R. Y., Wen, X., Butt, R. S., Hussain, H., Ali Qalati, S., & Abbas, I. (2020). Are growth-led financing decisions causing insolvency in the listed firms of Pakistan? Zagreb International Review of Economics & Business, 23(2), 89–115.
- Hussain, R. Y., Wen, X., Hussain, H., Saad, M., & Zafar, Z. (2022). Do leverage decisions mediate the relationship between board structure and insolvency risk? A comparative mediating role of capital structure and debt maturity. South Asian Journal of Business Studies, 11(1), 104–125.
- Hussain, R. Y., Xuezhou, W., Hussain, H., Saad, M., & Qalati, S. (2021). Corporate board vigilance and insolvency risk: A mediated moderation model of debt maturity and fixed collaterals. International Journal of Management and Economics, 57(1), 14–33.
- Jensen, M. C. (1986). Agency costs of free cash flow, corporate finance, and takeovers. The American Economic Review, 76(2), 323–329.
- Karas, M., & Režňáková, M. (2020). Cash flows indicators in the prediction of financial distress. Engineering Economics, 31(5), 525–535.
- Khanchel, I., Lassoued, N., & Khiari, C. (2024). Is eco-innovation the virtue of CEO grandiosity? The moderating roles of CEO ancestor origins and CEO tenure. Journal of Organizational Change Management, 37(5), 965–987.
- Li, X., Gupta, J., Bu, Z., & Kannothra, C. G. (2023). Effect of cash flow risk on corporate failures, and the moderating role of earnings management and abnormal compensation. International Review of Financial Analysis, 89, Article 102762.
- Memon, Z. A., Chen, Y., Tauni, M. Z., & Ali, H. (2018). The impact of cash flow volatility on firm leverage and debt maturity structure: Evidence from China. China Finance Review International, 8(1), 69–91.
- Minton, B. A., & Schrand, C. (1999). The impact of cash flow volatility on discretionary investment and the costs of debt and equity financing. Journal of Financial Economics, 54(3), 423–460.
- Minton, B. A., Schrand, C. M., & Walther, B. R. (2002). The role of volatility in forecasting. Review of Accounting Studies, 7(2), 195–215.
- Musa, A., Abdul Latif, R., & Abdul Majid, J. (2023). CEO attributes, board independence, and real earnings management: Evidence from Nigeria. Cogent Business & Management, 10(1), Article 2194464.
- Naser, A., Matemilola, B. T., & Bany-Ariffin, A. (2024). The interaction impact of cash flow volatility and fixed assets on debt maturity structure in MENA and African countries. Cogent Business & Management, 11(1), Article 2341842.
- Njuguna, T. W., Iraya, C., Nyamute, W., & Kiiru, J. (2022). Cashflow volatility, corporate investments, and value of nonfinancial firms listed in Kenya. European Journal of Business and Management Research, 7(4), 182–191.
- Nurmayanti, P., Indrawati, N., & DP, E. N. (2022). Top management characteristics and earnings management strategies: Evidence from Indonesia. Jurnal Dinamika Akuntansi Dan Bisnis, 9(2), 169–188.
- Pham, H. S. T., & Tran, H. T. (2020). CSR disclosure and firm performance: The mediating role of corporate reputation and moderating role of CEO integrity. Journal of Business Research, 120, 127–136.
- Phan, T. D., Hoang, T. T., & Tran, N. M. (2022). Cash flow and financial distress of private listed enterprises on the Vietnam stock market: A quantile regression approach. Cogent Business & Management, 9(1), Article 2121237.
- Pordea, D., David, D., & Mateș, D. (2020). The impact of operating cash flow and current ratio on the profitability in the construction industry. Studia Universitatis Vasile Goldiș Arad, Seria Științe Economice, 30(1), 22–32.
- Romadhina, A. P., Fitriani, M. N., & Andhitiyara, R. (2022). The effect of cash flow and currency exchange rate on financial distress. Jurnal Akuntansi Dan Perpajakan Jayakarta, 3(2), 146–167.
- Salotti, B. M., & Carvalho, J. V. d. F. (2024). On the edge: The impacts of cash flow at risk on the shareholders’ equity of public companies in Brazil. Revista Contabilidade & Finanças, 35(94), Article e1907.
- Samanta, N. (2019). Transplantation of Anglo-American corporate governance and its impact on financial market growth: A comparative analysis of nineteen developing countries 1995–2014. Corporate Governance: The International Journal of Business in Society, 19(5), 884–922.
- Scordis, N. A., Barrese, J., & Wang, P. (2008). The impact of cash flow volatility on systematic risk. Journal of Insurance Issues, 31, 43–71.
- Skarlicki, D., Lo, K., Rogo, R., Avolio, B. J., & DeHaas, C. (2023). The role of CEO accounts and perceived integrity in analysts’ forecasts. Organizational Behavior and Human Decision Processes, 176, Article 104250.
- Smithson, C., & Simkins, B. J. (2005). Does risk management add value? A survey of the evidence. Journal of Applied Corporate Finance, 17(3), 8–17.
- Sudarto, S., Adawiyah, W. R., Najmudin, N., & Jati, D. P. (2025). The impact of ownership and financial stability on bank liquidity creation. Studia Universitatis Vasile Goldiș Arad, Seria Științe Economice, 35(1), 30–48.
- Tetrault Sirsly, C. A. (2009). 75 years of lessons learned: Chief executive officer values and corporate social responsibility. Journal of Management History, 15(1), 78–94.
- Xuezhou, W., Hussain, R. Y., Hussain, H., Saad, M., & Butt, R. S. (2020). Interaction of asset tangibility on the relationship between leverage structure and financial distress in agriculture–linked non-financial firms. Scientific Papers Series Management, Economic Engineering in Agriculture and Rural Development, 20(3).
- Xuezhou, W., Hussain, R. Y., Salameh, A. A., Hussain, H., Khan, A. B., & Fareed, M. (2022). Does firm growth impede or expedite insolvency risk? A mediated moderation model of leverage maturity and potential fixed collaterals. Frontiers in Environmental Science, 10, Article 841380.
DOI: https://doi.org/10.2478/sues-2026-0018 | Journal eISSN: 2285-3065 (formerly 1584-2339) | Journal ISSN: 1584-2339
Language: English
Page range: 59 - 81
Submitted on: Jul 1, 2025
Accepted on: Nov 1, 2025
Published online: Oct 25, 2026
Published in print: Dec 1, 2026
Published by: Vasile Goldis Western University of Arad
In partnership with: Paradigm Publishing Services
Keywords:
Related subjects:
© 2026 Aqsa Safdar, Hammad Hassan Mirza, Haroon Hussain, Hira Irshad, published by Vasile Goldis Western University of Arad
This work is licensed under the Creative Commons Attribution 4.0 License.