Although numerous (especially small) business firms in Taiwan went bankrupt
or had financial distress, their financial data are often unavailable. Consequently,
we use the data from the Taiwan Stock Exchange (TSE). The Trading Code #46
of TSE specifies the conditions of a financially distressed company, which include
bankruptcy, reorganization and default. The financial statements of financially
distressed companies per TSE Trading Code are listed in a special database, which
can be easily identified