Corporate governance is the way of governing a firm in order to increase its accountability and to avoid any massive damage before it occurs. The aim of this paper is to investigate the impact of capital structure, firms’ size, and competitive advantages of firms as control variables on credit ratings. We investigate the role of corporate governance in improving the firms’ credit rating using a sample of Jordanian listed firms. We split firms into four categories according to WVB credit rating. We use both the binary logistic regression (LR) and the ordinal logistic regression (OLR) to model credit ratings in Jordanian environment. The empirical results show that the control variables are strong determinants of credit ratings. When we evaluate the relationship between the governance variables and credit ratings, we found interesting results. The board stockholders and board expertise are moderately significant. The board independence and role duality are weakly significant, while board size is insignificant.

American scientific publishing group

Predicting credit risk is vital for banks as it safeguards financial stability, minimizes default losses, optimizes capital, and ensures regulatory compliance. This study aims to predict credit risk (High/Low) in commercial banks by integrating machine learning with traditional econometric approaches. The Structural Learning in Vague Environments (SLAVE) fuzzy rule-based model handles ambiguity in financial decisions, while the eXtreme Gradient Boosting (XGBoost) uncovers non-linear patterns among predictors. Input variables—profitability, liquidity risk, ESG (environmental, social, and governance) score, and monetary freedom—were selected via multicollinearity tests and three panel regression models, including ordinary least squares (OLS), fixed effects, and random effects models. The empirical investigation uses a panel dataset of forty commercial banks across seven Middle Eastern countries from 2014 to 2023, yielding 400 observations. Regression results reveal that profitability and ESG score significantly reduce credit risk. Liquidity risk and monetary freedom increase credit risk. XGBoost combined with the SHapley Additive exPlanations (SHAP)-based interpretation identifies ESG Score as the most influential predictor. The SLAVE model was evaluated using three data splits: 70/30, 80/20, and 90/10. The 80/20 split achieved the highest accuracy, with superior performance in identifying low-risk banks. Stronger ESG performance and stable monetary environments contribute to fostering sustainable banking and reducing credit risk, making these indicators valuable for risk management frameworks in the Middle Eastern banking sector.