A Study on Industry Credit Risk

摘要

China 90% are the manufacturing industry enterprises, which industry GDP approximately composes 52% of that in 2008, if huge chain-like bankruptcy is breaking out, that will cause heavy losses to all China business community, financial circles and overall national GDP. This article studied the subject to test the influence of the endogenous credit risks to the manufacturing industry business efficiency. The study objects are 653 Chinese manufacturing industries, and by the Battese and Coelli's stochastic boundary model and data period from 2002 through 2008, we look into how enterprise key financial indicators affect enterprise performance. The results found that there is a negative relationship between the corporate performance and its credit risk in China manufacturing enterprise. The empirical results also show that strict financial controls on debt, accounts receivable collection and sufficient cash holding will reduce corporate credit risk and enforce operating efficiency.