Financial Distress in Chinese Industry: Microeconomic, Macroeconomic and Institutional Infuences

摘要

We study the impact of both microeconomic factors and the macroeconomyudon the financial distress of Chinese listed companies over a period of massive economic transition, 1995 to 2006. Based on anudeconomic model of financial distress under the institutional setting of state protection against exit, and using our own firm-level measure of distress, we find important impacts of firm characteristics, macroeconomic instability and institutional factors on the hazard rate of financial distress. The results are robust to unobserved heterogeneity at the firm level, as well as those shared by firms in similar macroeconomic founding conditions. Comparison with related studies for otherudeconomies highlights important policy implications.